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发帖数: 29846 | 1 Fracking Productivity Doubling Every Two Years
by Chriss W. Street
From fewer than 50 barrels a day in 2009 to 400 barrels today, fracking
technology has advanced at a pace that has doubled oil well production every
2 years. That pace of productivity improvement is almost identical to the
computer industry’s Moore’s Law, which expects the speed of processing
chip to double every 2 years.
The iPhone 3G state-of–the-art smartphone in 2009 had a computer processing
chip rated at 412 MHZ. The new Apple iPhone 6S sports the A9 processor with
dual 1.8 GHZ processors. Although Apple markets the speed as “amazingly
fast,” the improvement is just on pace with the average improvement for
processor chips.
Gordon E. Moore predicted in 1975 that the processing speed for the average
computer would double every two years. Despite all the nay-saying by so-
called industry “experts” at the time, computer speeds have consistently
doubled about every two years for the last four decades. Moore’s
problematic prediction is now called “Moore’s Law,” because the pace of
innovation has doubled computer speeds every 2 years and is expected to
continue at the same pace into the future.
Likewise, the nay-saying energy experts in 2009 claimed the world had
suffered “peak oil” two decades earlier, and production was in terminal
decline. But U.S. oil production has more than doubled in the last six years
because technological innovations continue roughly to double the
productivity of fracking about every two years.
It is now well known that the initial oil production from fracked wells has
improved by over 800 percent in just six years. But what is not understood
is that the decline in oil production in fracked wells has fallen by 80
percent over the same period. In 2009, production from fracked wells fell
from 50 barrels a day to 25 barrels per day in 6 months, and was not
commercially viable after one year. But for wells fracked in Texas’ Eagle
Ford region in 2014, initial production only fell from 400 barrels a day to
250 after six months, and the wells are expected to continue to be
commercially viable for 4 years.
Because of concerns with productivity, fracked wells in 2009 were required
to have at least 500 feet of spacing. But recent trends are allowing
fracking with just 100 feet of spacing,
This Moore’s Law-like tech driven productivity improvement explains why U.S
. oil production has continued to remain high despite the U.S. price of oil
falling to $45 a barrel over the last 15 months (about a 55 percent price
decline). That is even more impressive, given that the number of oil rigs
running in the U.S. fell from a peak of about 1,600 a day in October 2014 to
about 675 today.
Most of the fracking boom was paid for with the issuance of junk bonds, and
Moody’s credit rating service warns that about one in eight of those are at
risk of filing for bankruptcy at current oil prices. Despite how much money
bondholders may lose on financing all the fracking exploration and
leasehold purchases, banks are still going to continue to fund fracking
production on established wells sites until the cash flow turns negative.
The price of oil adjusted for inflation over the last 140 years averaged $30
a barrel; since 1946 it averaged $42 a barrel; since 1980 it averaged $53 a
barrel, and from 2000 it averaged $64.50 a barrel. |
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