An In-Depth Look At The Shale Revolution

Almost a decade ago now, the US underwent one of the history’s biggest ever energy revolutions. Commonly known as ‘The Shale Revolution’, it’s had an immense impact on global crude oil markets. But what happened and why has it had as large an impact as it has? Well, that’s exactly what the team here at TriStone Holdings Ltd, one of the UK’s most exciting oil investment companies, wanted to explore today.

What Was It?

The Shale Revolution can perhaps best be typified as the energy transformation which took place in the United States over the last decade, or so. The period of time, in which the US was catapulted to the top of the global leader boards in terms of oil and gas production, hinged on unlocking the crude oil fuel potential of ‘shale’ rocks.

What Is Shale?

To give its technical description, shale is a “fine-grained, clastic sedimentary rock”. This basically means rock formed over a large geological timeframe by the accumulation of deposits on top of one another. This compaction, when paired with an additional ‘cementing’ by salt crystals, leads to the formation sedimentary rock deposits as we see them today. Why that’s interesting to an oil investment company, such as ours, however, is that from oil shale, producers can extract ‘tight oil’ – a particular kind of light crude oil.

How Is Tight Oil Extracted?

Hydraulic Fracturing (“Fracking”)

The Shale Revolution owes the majority of its successes to a technique which you might well already have heard of – fracking. This unconventional drilling process involves injecting a mixture of water, chemicals and sand underground at extremely high pressures. This highly-pressurised mixture ‘cracks’ open the layers of rock. In turn, this causes the release of any trapped hydrocarbons like tight oil.

Why Did It Only Really Take Off, Recently?

The process has been around for years. In fact, the first hydraulic fracturing experiment was carried out in the field all the way back in 1947 by the wonderfully-named Floyd Farris. So, why did it take until the last decade for this boom in fracking to take shape? Well, as with so much in life, there’s no one singular reason, rather a combination of factors.

Reason 1 – Technology

Firstly, the technology was continually being improved and innovated. Though the basic process has remained virtually unchanged, over the last 70 years, the technology has become more advanced. In the 1990s for instance, a man named George P. Mitchell came up with a new technique, whereby fracking implemented some of the techniques used within horizontal drilling. This change greatly improved the technique’s economic viability.

Reason 2 – Market Conditions

Secondly, it was a result of the markets, themselves. From around the 2010 mark, oil prices began to consistently rise, facilitating the higher capital investment that fracking required.

Reason 3 – Existing Infrastructure

Thirdly, the US was fortunate enough to have an oil and gas infrastructure already ripe for expansion. Its long-established history within the oil and gas sector meant that shale production could be quickly and easily scaled up to cater for the increasing production. It was, in other words, a case of it being the right time and right place for fracking within the US. It’s worth noting that fracking remains strong, across the pond, even now.

How Has The Shale Revolution Affected The United States?

Given that the arrival of this revolution brought about such drastic changes to the US energy sector, it’s worth considering its impacts on a broader scale. In other words, just how exactly has the USA been affected by the Shale Revolution? Well, some of its impacts include:

  • A reduction in energy prices. Estimates from the US Council of Economic Advisors (CEA) have suggested that Shale’s development has led to a 45% reduction in wholesale electricity prices. The reductions similarly seen in natural gas and oil prices mean that the lowest 20% of US households (economically-speaking) have saved around 7% of their annual income, thanks to the Shale Revolution.
  • Stronger national manufacturing. The revolution as seen an increasing number of factories being built, particularly in the states of Pennsylvania and Texas.
  • Decreasing coal market share. Where there are winners, there are inevitably losers. Whilst the shale industry has leapt to giddy new heights over the past few years, this has been to the detriment of the coal industry, with one in four of the US’ coal power plants having closed, since 2011. Natural gas burns much cleaner than coal, though, so this is perhaps no bad thing.

The Focus Of Our Oil Investment Company

You can find out more about the differences between conventional and unconventional drilling in our previous blog post, here. Here at TriStone Holdings Ltd, though, our oil investment company is focused on the Viola Prospect, in Kansas, USA. You can find more details about it here. This area, located in the vast central swathe of the Cherokee Basin, contains multiple sand and limestone formations with the potential for considerable upstream operations (both oil and natural gas).

Contact TriStone Holdings Ltd

So, if you’d like to find out more about our oil investment companies, then get in touch! Contact TriStone Holdings Ltd today by calling us on 0800 055 7079 or by emailing at [email protected] We’re always available for questions from our investors and members of the public.

Oil and Gas

Versatile Beyond Belief: CO2 Storage In Depleted Oil Fields

In recent times, there’s been an increasing drive from oil operators to tighten up their environmental efficiencies, where possible. Amongst the most nuanced advances made over the past couple of decades has been the revelation that abandoned (or depleting) oil fields can actually play their part in carbon storage, and in achieving a greener future. The old dog, it seems, has a few tricks up its sleeve when its production days are over. TriStone Holdings Ltd is a burgeoning UK oil investment firm. We wanted to examine this CO2 storage and sequestration process in more detail, as well as some of the more recent examples of the technique, in action.

How Does It Work?

CO2 injection is now a well-understood branch of CCS (Carbon Capture and Storage). This process has been used for both oil and gas, and for both onshore and offshore operations, so you can see just how wide its scope is. The advent of the technique brought with it concerns pertaining to wellbore integrity, for instance, and the management hazards associated with re-using infrastructure, however these have now well and truly been overcome. In practice, the process involves the following:

Carbon Capture And Transportation

Before the CO2 is stored it must first be captured – the two Cs of the acronym. This can be done in various ways, including carbon scrubbing, membrane gas separation and adsorption. The carbon dioxide must then be transported to the location of its sequestration. This is typically done using extensive networks of pipelines; the United States, for instance, has over 5,000 kilometres of pipeline used to transport the gas.

Storage (Sequestration)

Finally comes the storage itself. Also known as geo-sequestration, this process involves injecting the CO2 into various geological formations. Oil fields are what we’re particularly interested in here at TriStone Holdings Ltd. For onshore operations, both carbonate and sandstone reservoirs have proven to be suitable for storage, making use of a cap rock to prevent any leakage.

A North Sea Case Study

Though this might sound like a thoroughly modern invention, it’s actually a process which has been around for sometime now. In fact, oil operator Equinor commissioned a CO2 storage project for its offshore Sleipner field, back in 1996. Whilst this is an example of offshore storage, and natural gas rather than crude oil, the principles are the same and so too, importantly, are the results. Over the past couple of decades, the platform has successfully injected and monitored CO2. To be precise, over 16 million Megatons!

Over that time, the operator has demonstrated that carbon dioxide could be safely stored, whilst at the same time producing economic and environmental benefits as a result. In other words, the Sleipner project has been a resounding success. In a time of such uncertainty, it’s nice as an oil investment company to remind ourselves that innovation flourishes during times of adversity, and it’s what the industry’s doing now.

Last year, Equinor released a data-sharing platform in which their data from the Sleipner platform could be viewed and examined; transparent collaboration of this sort will no doubt prove integral to operators, moving forward, in their efforts to discover ever more complex and sophisticated carbon capture and storage schemes.

Far From Alone…

The Sleipner platform is far from the only major CCS scheme planned within Europe. That said, at present, there are only a few fully operational examples; others remain at the pre-study or feasibility study stage. Also located in Norway is the Snøhvit CO2 Storage scheme. Since 2008, the LNG facility at Hammerfest, in Norway, has been injecting CO2 an impressive 2,500 metres down below the surface at the Snøhvit field, with over 700,000 tonnes of the gas being stored, annually.

Enhanced Oil Recovery – One Final Trick Up The Sleeve

For older oil fields not yet out of commission, CO2 storage can actually be used to help extract oil! How does the saying about birds and stones go, again? The economic costs and benefits of injecting CO2 in the EOR (Enhanced Oil Recovery) process are varied. They very much depend on the prevailing market conditions at the time. That said, using anthropogenic fossil fuels presents nations with a fantastic way of both tackling their environmental pledges. At the same time, it means they can meet stakeholder and global energy demand.

Is Oil Field CCS The Future?

There’s a growing consensus that a large part of the oil and gas sector’s future lies in the advancement of CCS schemes. With increasingly advanced technology, they’re becoming increasingly economically viable, even for smaller operators. There’s something inherently satisfying about the cyclical nature of such schemes, with O&G firms looking to give back when they take out!

Contact TriStone Holdings Ltd

Capturing carbon from the atmosphere is seen by many as being one of the most practical ways in which global energy standards can be met, over the coming years. Oil fields will no doubt play an increasing role within that.

So, if you’d like to find out more about our oil investment company, then get in touch! Contact TriStone Holdings Ltd today on 0800 055 7079 or by emailing at [email protected]