Capitalize on the Shale Oil Boom with New Data Management Technology
Ever since the early 20th century, oil companies have sought to make shale oil commercially viable, with limited success. The last boom in the United States started in 2003, with the initiation of a shale oil development program. Growth in the sector was supported by the passage of the Energy Policy Act of 2005, which financed a commercial leasing program for oil shale and tar sands resources in several western states. Over the next few years, the government awarded leases to multiple oil companies, but the initial excitement about shale oil fizzled out, and many companies abandoned their research and development efforts to focus on other projects.1
However, interest in shale oil has been reignited within the industry in the last few years, and has been particularly strong for the last six months. In order to capitalize on the boom in the shale oil industry, oil companies will need to invest in shale oil discovery and development research. New data management technology, such as electronic lab notebooks, can be used to support these efforts.
The Promise of the Shale Oil Industry
Given the varied history of shale oil, some oil companies are wary of investing time and resources into research and development. However, with this most recent boom, economists, investors, and industry insiders alike are characterizing shale oil as “the future of the oil industry.”2 More banks than ever are willing—and even eager—to invest in shale oil projects, and oil companies are taking advantage of these opportunities to identify new shale oil extraction sites and build up their existing extraction infrastructure.
The result has been the most significant shale oil boom in recent memory. Over the last six months, shale drillers in the United States have added active rigs almost every week. Based on current levels of growth, economists predict that U.S. output of shale oil will reach 10 million barrels per day before the end of 2017.3 The long-term forecasts are even more optimistic—the firm PIRA Energy predicts that the United States will export 2.25 million barrels of crude oil per day by 2020, with a significant proportion coming from shale oil.
Using Data Management Technology to Support Shale Oil Research
In order to maximize shale oil output, oil companies can use the increasingly available investment money to identify potential shale oil drilling sites, evaluate the feasibility of production at these sites, and develop oil infrastructure at the most promising locations. In these efforts, a large amount of data will be collected and analyzed. There are several ways in which new data management technology, such as electronic lab notebooks, can support this work:
- Facilitating data transfer. Electronic lab notebooks can simplify data transfer between interested parties within the oil company. When scientists in the field collect data on a potential shale oil extraction site and record it in an electronic lab notebook, they can quickly transfer the information back to lab-based researchers who can assess the site. The data can also be shared in real-time with engineers who can start designing and tailoring equipment to meet unique site specifications. In addition, decision-makers in the company can look at site data and use it to steer future development efforts.
- Ensuring compliance with legal regulations. When it comes to shale oil development, compliance is a significant concern for oil companies. Since the early 2000s, shale oil development has been the subject of legislation at the federal, state, and local levels. Electronic lab notebooks can make it easier to comply with regulations in different locations and support accurate, easy reporting procedures.
- Enabling comparisons between sites. As oil companies look to open more active rigs for shale oil extraction, it will be important to discern the most promising extraction sites from the less profitable options. Using electronic notebooks instead of paper, it is much easier for scientists and decision-makers to access the data from multiple potential development sites and compare it side by side. This can lead to better business choices that can help keep shale oil economically viable for the long term.
As shale oil continues to boom, oil companies have an unprecedented opportunity to establish themselves within this promising sector of the industry. New data management technology offers the high-level capabilities that today’s researchers need to improve the quality and efficiency of development efforts.
- “Chevron giving up oil shale research in western Colorado to pursue other projects,” 2012, http://www.coloradoindependent.com/114365/chevron-giving-up-oil-shale-research-in-western-colorado-to-pursue-other-projects ↩
- “World’s biggest oil traders zero in on shale hot spots,” July 11, 2017, http://oilprice.com/Energy/Oil-Prices/Worlds-Biggest-Oil-Traders-Zero-In-On-Shale-Hot-Spots.html ↩
- “Wall Street cash pumps up oil production even as prices sag,” July 7, 2017, https://www.wsj.com/articles/wall-street-cash-pumps-up-oil-production-even-as-prices-sag-1499419801 ↩