Oil Boom Shifts The Landscape Of Rural North Dakota

A directional driller reviews computer monitors while drilling for oil in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota.

Future oil and natural gas production as well as exploration is expected to take place in some of the most remote and inaccessible places in the world. Reservoirs with the highest commercial potential are seen to be located offshore in deep waters or in the Arctic. Both “frontier” areas have challenges in common such as harsh operating conditions, high initial project development costs, significant financial risks, and not least environmental risks. This is where the next wave of innovation and technology becomes relevant and crucial. A new range of technologies is required for exploration and development of those energy resources in order to tackle all challenges in a responsible way.

At the forefront here is ExxonMobil, which uses ‘extended reach technology’ to develop long-reach wells that can extend horizontally for miles underground. “By using this technology, previously inaccessible resources can be developed, often in complex and challenging environments such as the Arctic,” ExxonMobil explains on its website.

The rationale behind this drilling innovation seems straightforward: “Extended reach technology reduces our environmental footprint and, in offshore applications, limits our presence in the marine environment, reducing underwater noise and other activities. In onshore applications where a well is drilled from a land-based location to reach oil and gas deep under the ocean, interaction with marine life and the marine environment can be entirely eliminated.” Another interesting technological innovation is ExxonMobil’s ‘fast drill process’, which is “a physics-based process combining real-time digital analysis of the drilling system’s energy consumption with a structured approach to well planning and design.” This ensures that the well is drilled efficiently by improving the drilling rate, which leads to concomitant reduced fuel consumption, and as a result also decreases GHG emissions in proportion.

These examples make clear that new technologies must simultaneously be cost effective, environmentally friendly, attractive enough for funding and thus commercially viable. Remember, technology – often innovative in terms of its new application – developed by the oil and gas industry ushered in an unprecedented surge in US oil and natural gas production and recoverable reserves. Numerous other examples range from new techniques as well as equipment for hydraulic fracturing, automated laser-guided drilling, to 3D seismic surveying used in oil exploration with the help of ‘big data’- capable computer software and high-speed data transfer on, for example, wellhead conditions or mechanical systems for real-time analysis in order to optimize production and minimize risks as much as possible.

By the same token, Shell’s Chief Technology Officer Gerald Schotman points to the importance of geoscience innovation in discovering and developing more oil and gas to help meet rising future global energy demand: “Technology underpins our ability to shape the future of energy. But we must have a clear vision of the future to know what technology we must develop today.” Take a look at the following graphic depicting what Shell CTO Schotman sees as the next wave of innovation. Most importantly, oil and gas innovations tend to originate in the non-oil and gas sector, which will help to put a relative cap on energy companies’ research and development expenses.

shell inforgraphic

Source: Shell