Houston-based oil and gas company EOG Resources recently said it has successfully used natural gas in the hydraulic-fracture drilling of 15 mature horizontal oil wells, a process that could reduce the costs of oil production in the U.S., the American Legislative Exchange Council said.
Standard hydraulic fracturing, or fracking, uses water, sand and trace amounts of chemicals to increase production in horizontal oil wells. The new process from EOG replaces that water with natural gas, which is cheaper than water in the oil patch, thereby reducing the costs of production.
The new process could be instrumental in stimulating U.S. oil production, which has stalled over the past two years in response to increased production in OPEC countries such as Saudi Arabia. This has led to lower market prices for oil, spurring unconventional drilling operations, including fracking, to shut down and leading to a corresponding loss of 100,000 U.S. jobs.
While EOG’s new fracking technique has to date been used only in geologically unique wells, the company is planning to expand the pilot project to a further 32 wells this year. It is unclear whether the practice will be replicable in other shale plays, but it does present a promising opportunity for oil production growth.
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