As shocking as it might seem, for the first time in decades, the U.S. is an energy superpower. According to the International Energy Agency, by 2016 the U.S. will surpass Saudi Arabia and Russia to become the world’s largest oil producer.
Greater production and reduced consumption has helped America achieve this status. But the real hero is actually a villain in many circles — shale oil. Shale’s controversial horizontal drilling and hydraulic fracturing (fracking) processes are extracting rich deposits of oil from hard to reach spaces beneath the earth, but not without impacting the environment.
The U.S. is currently on track to match in the next 5 years its record oil output from 1970 of 9.6 million barrels per day (bpd). Just in Texas alone, Eagle Ford and Permian Basin have generated nearly 2 million bpd in 2013. Several other states are gearing up for oil boom as well. EIA projects US shale oil production will reach 4.8 million bpd in 2021.
While controversial, horizontal drilling and fracking processes are used in about 60 percent of oil and 98 percent of natural gas wells. In response, environmental groups across the country are sounding the alarm over potential groundwater contamination and earthquakes.
Rather than shutting down new energy sources for their potential to do harm, oil and gas companies have an opportunity to make them safer and more efficient by becoming smarter about the resources and the production process.
As the industry transitions from grabbing acreage to “shale manufacturing” and the capital expenditures go up, the winners will be the companies that can get (much) more shale oil out – cheaper, faster, and of course, safer. For example, 80 percent of shale production in North America comes from just 20 percent of the fracking stages. According to PacWest, drillers will spend $31 billion in 2013 on suboptimal frack stages across 26,100 wells in the U.S. There’s obviously plenty of room for improvement.
How? Just listen. The rumbling you hear underground isn’t just oil. It’s gushers of data that if analyzed properly can yield new insights to producing more shale oil while reducing negative effects on the environment. According to McKinsey, Energy and Big Data are two of the top-five game-changers for the U.S. economy and can together add up to $1 trillion to the GDP of U.S. by 2020 — and the interesting thing is this analysis doesn’t even take into account the effect of Big Data Analytics in Energy.