What is Shale Oil?
Shale oil is an unconventional and sometimes controversial source of energy. This form of crude oil is obtained by mining a field above or below the earth; in cases where the oil is beneath the earth, fracturing or a heating process is used to extract it. Mining this type of crude oil is more expensive than regular oil drilling; however, it does enable a company to drill for oil reserves that were previously inaccessible.
Key Industry Trends
Heightened Interest in Drilling
Shale oil is found in various states in the United States and there are many companies that are involved in drilling for it, including Devon Energy, Continental Resources and EOG Resources. These companies are moving full speed ahead to drill as much oil as possible, despite the fact that the overall cost of oil is quite low and there is a possibility of it falling even further.
Shutting Down Old Fields
While companies are planning to open a number of new fields in 2015, they also have plans in place to phase out and shut down fields that are not as productive as they were in times past. Depending on where the new and old fields are located, this could lead to a boost in hiring in some states and a loss of jobs in others.
The oil shale boom is slowly but surely moving beyond the United States. While the U.S. presently produces more shale oil than other nations, it is no longer the only country that is interested in this particular source of energy. Both Canada and China have commercial oil shale productions. Argentina has the potential to follow in their footsteps, as experts note that the country has the right geological composition for drilling as well as low investment costs. What is more, Argentina urgently needs the additional energy, which means that demand could help drive the market and enable companies to make a tidy profit.
There are dozens of other countries around the world that have shale fields; while many of these countries are not currently engaged in drilling, there is always the possibility that they may start to do so in the foreseeable future, especially if oil prices rise above $80 a barrel.
While some oil shale production companies are struggling due to the low cost of oil and the high cost of extracting shale from underground reserves, the industry as a whole is moving ahead. This is good news not only for those who work in the industry but also for companies that offer pipe protection products and/or other accessories needed to safely extract and transport the oil to the market. Shale oil can help a nation attain energy independence and offers high paying jobs to tens of thousands of people. While there is still some controversy regarding the long-term effects of shale oil drilling on the environment, this form of energy extraction is not only here to stay but is also likely to expand in the coming years.
Essentra looks forward to the changes in shale production, and we’re here for all your pipe protection needs along the way. Contact us today!