Question: What is tight oil, and is there really enough of it to make a significant difference in the economy?
Answer: Tight oil refers to oil found in extremely low permeability (i.e. tight) reservoir rock, the structure of which traps oil and prevents it from flowing freely. Historically, this has meant that the cost of extracting such oil was too high to be worthwhile. However, technological advancements in drilling (long-reach horizontal well bores) and completion techniques (multi-stage hydraulic fracturing), have helped unlock enormous quantities of oil from tight reservoirs at reasonable expense.
As recently as five years ago, it was commonly believed that the world was entering an era of permanent scarcity, where gas and oil production worldwide would inevitably decline. However, new drilling technologies have challenged the original beliefs. US production has risen 25 percent since 2008, and the largest segment of increase is from tight oil. In 2011, the US registered the largest boost in oil production of any country outside of OPEC. In the US, tight oil production alone could reach more than four million barrels per day by 2020. The supply won’t soon be exhausted, either; according to a report commissioned by the U.S. Department of Energy, about 24 billion barrels of recoverable oil is held in shale oil formations in the lower 48 states.
In the past, arguments for domestic oil production have focused primarily on improving energy security and the balance of trade. Now, however, recognition is spreading that increased oil production and supply in this country is an important source of economic growth; with less oil imported from foreign sources, more money remains in this country. Domestic production in areas such as the Bakken and Marcellus shales show us exactly how such job creation can trickle down to fuel an entire economy. Lower fuel prices are themselves fostering a resurgence in the manufacturing industry in this country.
BTL Liners believes that tight and other unconventional oils have the potential to lead a new era of economic growth and energy stability in North America by encouraging domestic jobs and energy independence for our great country. We are proud to be involved in the growth and development of such a promising industry!