HEAVY IRON NEWS
The US Has An Advantage When It Comes To Unconventional Resources
Design Team • February 9, 2016
The United States has become a leading producer of unconventional resources, including shale gas, tight oil, and coalbed methane resources. Though these unconventional resources have been historically looked over by the global oil and gas company, the United States is uniquely poised to take advantage of them, and demand for energy resources is quickly rising. Hydraulic fracturing has contributed to a significant portion of these unconventional resources, through technological innovation and rapid development.
GLOBAL TRENDS LEADING TO DOMESTIC INNOVATION
Many countries have been able to develop their economy through surges within the oil and gas industry. In other countries, however, these surges were due to the conventional drilling of oil and gas. Shale oil production and unconventional forms of vertical drilling have created a unique climate in the domestic industry. The domestic industry has been forced to innovate in the wake of falling domestic oil prices and issues related to foreign supply. Independent oil and gas companies have developed new technologies that can be used to recover more oil than ever before. Though recovering shale oil and other unconventional resources may be more expensive than conventional drilling, it offers a significantly larger volume of resources. As there are known shale oil reserves, it also cuts down on the exploration and discovery process required. Unconventional resources can also be extracted from drilling and production sites that were previously believed to be depleted.
A PERFECT STORM OF FACTORS LEADING THE DOMESTIC MARKET
Though there are shale oil reserves located in many places throughout the globe, the domestic United States market had many contributing factors that tilted the industry towards unconventional resources. Not only is there a wealth of shale gas available throughout North America (including Canada), but hydraulic fracturing technology made it easier than ever to access this shale gas. The development of unconventional drilling by independent oil and gas companies also cost quite a bit of money, but the economic recovery in America created a wealthy oil and gas industry that could invest in forward-thinking and innovative technologies. Once shale gas technologies had been developed by this influx of cash, the oil and gas market experienced a crash. Rather than discouraging independent drilling, the oil and gas market crash actually encouraged it; domestic producers were aware that volume would be essential for market recovery, and unconventional drilling was the best way to create this volume.
THE FUTURE OF UNCONVENTIONAL RESOURCES
As the United States continues to fine-tune its production of unconventional resources, the market is likely to continue to strengthen. Many analysts believe that both natural gas and oil prices will be on the rebound within the next few years. This will likely lead to significant expansion throughout domestic oil production, as independent producers have become extremely skilled at extracting the largest amounts of resources with the smallest investment. And though oil will likely become a boon to the industry, it is natural gas that is likely to change the market. Natural gas is an ecologically friendly option compared to many other types of resource and is rapidly increasing in adoption throughout the world.
The United States currently has an extremely firm hold on unconventional resources. It's believed that the natural gas resources in the United States could sustain natural gas use for up to a century depending on demand. As the global demand for energy increases, it's likely that the economy of the United States will be able to benefit significantly from its ability to recover previously ignored energy resources.
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