Disruptive innovation returns Texas to its oil and gas leadership.
In its latest report “Game Changers: Opportunities for US growth and renewal,” strategy consulting firm McKinsey identifies hydraulic fractacturing as one of the five catalysts for economic growth by 2020.
Driven by technological advances in horizontal drilling and hydraulic fracturing. This process has unlocked large deposits of both natural gas and oil trapped in shale—resources once considered too difficult or costly to extract. From 2007 to 2012, North American shale gas production climbed by more than 50 percent annually. Today, production of so-called light tight oil is growing even faster.
In one of the major shale formations, the Permian Basin , the total recoverable resource potential of the Spraber ry and Wolfcamp formations are expected to be approximately 50 billion barrels of oil equivalent. That potential supply is second only to the Ghawar Field in Saudi Arabia.
McKinsey points out that the shale boom has already provided an immediate spark as it coaxes private capital off the sidelines and leads to new investment in both oil and gas production and energy-intensive manufacturing. Increased trade competitiveness can have a relatively rapid impact by leveraging global demand and building on US strengths in innovation.
The Permian Basin is rich in oil and gas, but water is scarce. The rugged, dynamic operations on a drill pad will require that new technologies be engineered for the environment. Look for the few products that succeed in shale gas drilling to come from the Permian Basin formations.