A hundred and fifty years since its unearthing, oil maintains its critical role in the world’s economy. It seems that ever since the world has become dependent on oil, it has worried that its reserves will run out.
Although oil is a primary source of energy for many countries, its positioning has been re-evaluated since the energy shortages in the 1970s and 80s where the developed world was forced to realize how dependant it was on petroleum products and vulnerable to deficits in supply. In the early 1970s, 46% of the global energy consumption was oil; in 2005, oil accounted for 35%.
Today, oil still tops other energy source on a worldwide scale (nuclear power covers 6% of the world’s energy needs, natural gas covers 20% and coal, 25%).
Oil dependence
The world is very dependent on oil and the primary reason is that oil possesses some very interesting characteristics. Oil offers optimal energy in a small volume, making it easy to transport.
Also, using distillation, oil can be separated into other products such as gasoline, kerosene, bitumen and paraffin.
Maximum oil production
Many theorists predict that the oil production has reached its maximum potential and that current output levels are not maintainable.
As of yet, the oil industry has maintained, even raised, its production by using newly available technologies: deep water drilling, three dimensional seismic imaging and horizontal drilling.
Horizontal drilling consists in drilling horizontally into rock, pumping water, sand and drilling fluids into the gaps in order to split the shale.
Roller coaster
It seems that the price of oil is constantly increasing and dropping; in the past ten years, the cost of a barrel of crude oil has risen steadily from 2002 to 2007, peaking at $147 in 2008 to then crash to $33 a barrel some 6 months later as a result of a worldwide recession which largely affected demand. In 2010, with some economic revival, the barrel price had gone back up to $80 and, so far, in 2011 the increasing price in energy costs is bringing back memories of 2008; suddenly, oil is back up to $100 a barrel and, amidst fears of long term Middle East interruptions in supplies, this will likely increase further.
Horizontal drilling: new opportunities
Fortunately, technology is allowing companies to explore oil and gas reservoirs that were previously deemed inaccessible, either economically or technically. Horizontal directional drilling is opening up new opportunities such as accessing poor quality rock that would have been considered far too costly to access using conventional vertical drilling. Horizontal drilling has re-energized the drilling industry by enabling oil to be located and accessed in areas that remained untapped in the past due. It is estimated that horizontal drilling techniques will elevate oil production in the United Stated by roughly 20% over the next 4 or 5 years.
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http://topics.nytimes.com/top/news/business/energy-environment/oil-petroleum-and-gasoline/index.html?scp=2&sq=horizontal%20drilling%20&st=cse
http://www.theenergyreport.com/pub/na/8840