The Shale Oil and Gas Revolution
The Shale Oil and Gas Revolution has changed the energy world. Intertek has kept pace by providing crucial and timely exploration, production, quality, quantity inventory, compliance, certification, training, inspection and logistics support and expertise to an industry in radical transition.
Shale Oil Beats “Peak Oil”
Thanks to shale oil and gas, the world’s economy is no longer running out of energy-rich hydrocarbons. Rather, we’re now awash in a global bath of cheap oil and gas. What happened to cause this dramatic change in fortune? Simply put, North American Shale Oil and Gas Happened, using the combination of Hydraulic Fracturing and Horizontal Drilling technologies.
The combined technologies, hydraulic fracturing and radial horizontal well drilling, provided unprecedented accessibility to the huge hydrocarbon-rich shale deposits of North America. Intertek upstream oil & gas technical services helped clients to evaluate potential production sites and shale crude reservoirs, and to optimize production while supporting asset integrity management programs.
Starting in 2011, the massive growth of shale oil and gas production began in key regions such as West Texas and North Dakota, transforming the USA crude oil and natural gas markets in a profound and permanent way. Less expensive natural gas prices thanks to shale gas production has sparked a rapid restructuring of the power generation industry as power-plants reduce coal and turn to natural gas. Inexpensive feedstocks have fueled a massive expansion of the petrochemical industry and the construction of new Liquefied Natural Gas (LNG) export plants.
The impact of shale oil on the domestic and then international crude oil market was no less dramatic during this time. The tsunami of new shale crude oil flooded the USA with inexpensive petroleum feedstocks and condensates. These new crudes found welcoming markets, benefiting Inland refiners at first, but soon followed by East Coast, Gulf Coast, and West Coast refineries. Limited pipeline networks in the new shale areas meant that “Crude-by-Truck” and especially “Crude-by-Rail” became viable options to get these new crude oils to market. “Crude-by-Water” has witnessed tremendous growth as barges, Jones Act Tankers, and limited international export tankers activity has ballooned in volume.
Pipelines built after World War II to send imported crude oil north from the Gulf Coast to landlocked inland refiners were reversed for the first time in their long existence, sending domestic shale crude south to Texas and Louisiana refiners and beyond. New refineries were built for the first time in decades and old ones reopened, purpose-built to handle the new shale crudes.
Imported crude oil from West Africa, the Middle East and Latin America were essentially replaced by the usage of domestic USA shale oil. Quiet places like the Bakken and Eagle Ford became household names and experienced rapid economic expansion and population growth, not unlike the California Gold Rush of 1849.
Helping the Oil & Gas Industry Keep Up With the Shale Revolution
The frenetic pace of expansion in both the volume and diversity of new crude oil sources from shale has presented a series of challenges to the industry. Transporting the new crudes to market was an immediate concern, as pipelines were often not developed or feasible. As a consequence, the usage of trucks, rail, and barge to transport shale crude and condensates has skyrocketed since in recent years.
While these options help to move the product; quality, quantity, and safety concerns become a bigger issue for shippers and refiners.
The presence of higher levels of H2S (hydrogen sulfide) in some new crude oils, for example, meant that extra care and attention had to be paid for personnel safety. Efforts to improve Crude-by-Rail safety include the introduction of newer and heavier rail cars along with regulations on crude oil vapor pressure. Intertek has played an important role in helping to measure and monitor key factors related to safety, including H2S measurement and management, corrosion testing, and crude oil vapor pressure testing. Intertek hazardous location training and competency certification for field personnel and certification for oil-field and refinery equipment and instrumentation help promote safe working conditions and reduce the risk of accidents. Intertek plays a major role in shaping sampling and analytical techniques in the industry as a leader, and provides advice to governmental agencies and commercial clients.
Refineries are optimized to run on specific ‘diets’ of crude oil. Crude oil can range from ‘heavy’ to ‘light’ and from ‘sour’ to ‘sweet’. The components which make up a crude oil or crude oil blend can vary. These crude oil variations can help boost the productivity of a refinery or cause unwanted yield, production, and safety problems. Intertek started working with our refinery clients as soon as shale crudes were being delivered, helping to measure the quality and quantity aspects of these new feedstocks. Additional Intertek services offered help reduce commercial risks include tank calibration, volume metering, and other related services.
Breaking the “Code” on how to successfully extract shale crude oil and gas is a major success story, with economic benefits for the USA and the world. As with any new and rapidly growing business, there can be growing pains. Intertek’s expertise and resources help the industry grow and prosper, while meeting safety, quality, regulatory and social obligations.
Need help or have a question?
- +65 6805 4800
- +61 1300 046 837
- +31 88 126 8702
- +32 3 543 9089
- +55 11 2322 8033
- 400 820 5033
- +86 21 6485 5558
- EMEA - UK:
- +44 1708 680 200
- +33 2 35 13 41 00
- 0800 5855888
- +49 711 27311 152
- + 91 22 4245 0100
- +39 02 95383833
- 01 800 5468 3783
- +52 55 5091 2150
- +34 902 377 388
- +41 43 4337810
- +971 4 317 8777
- New Zealand:
- +64 9 432 7521