Shale oil is the most significant development in the energy industry ever since coal was replaced by oil as the principal fuel. The noteworthy rise of shale oil extraction over the last few years has taken the market by surprise. The combination of drilling techniques together with developed hydraulic fracturing and the rebound of oil prices have made large volumes of shale oil production possible.
Despite important innovations in green energies in recent years, fossil fuels like petroleum, natural gas, and coal represent the majority of the world's energy. Over the past decades, the nuclear and hydropower sources have augmented their contribution to producing energy. Going ahead, the extraction of shale oil is anticipated to keep on rising however it will be directly dependent on the cash in-flow to finance the investments in the new wells.
Since energy is the foremost necessary foundations of the modern economy together with the moderating global oil demand, there is a relative stability on high demands in the future.
Due to the innovations created throughout varied stages of oil and gas energy, the shale oil and different nonconventional reservoirs have become more economical. The investors who lost patience due to the lacklustre return of shale companies are getting hopeful since productivity increased for the same investment.Last Friday (27 July 2018), BP unveiled a US$10.5 Billion deal to acquire 100% Petrohawk Energy Corporation, the BHP subsidiary that holds interests in the Eagle Ford, Haynesville and Permian basin shale assets. This new investment will probably ensure continued cash flow and higher yield, especially in the Permian Basin.
The changes in shale oil production and exploration will increase the energy security of the markets; however, it brings a complex set of challenges at global and local levels. The self-sufficiency ratio is projected to decrease significantly with energy import dependency. This might entail a reduction of oil trade.
Environmental and occupational hazards:Utilization of a large amount of water and toxic chemicals used in the hydraulic process may not only become the cause of contamination but also a source of threat to drinking water.
The massive use of chemicals, associated emissions, and truck traffic have a considerable impact on the environment, biodiversity, and ecosystems.
A number of social, cultural and economic consequences for the local communities arise from the different factors like landscape impacts, high volume of truck traffic, and the consequences of an influx of new workforces into an area.
A lot of challenges are involved to operating companies pertaining to the scale and multiple operators and contractors working in a single area raising issues for coordination and the anticipation and management of risks, including accidents and occupational health hazards.
Water supplies might be polluted if the fracturing fluid contacts fresh groundwater supplies. The fracturing fluid contains many chemical additives including hydrochloric acid, heavy metals, and radioactive chemicals, which are all extremely toxic to living organisms.
Although the oil and gas industry has adopted the techniques to determine and evaluate risks and opportunities for conventional resources, there is no clear framework to characterize these unconventional methods. But many companies have put huge resources towards new methods and to better the quality.
In a country with weak governance and poor contractor management, the major concern is to provide effective oversight for considering all complex potential impacts.
Why is shale oil important?
The development and potential of shale oil and gas and the accessibility to huge resources in the world will have considerable political and economic changes as well and this might be bringing independence and affordability in the long term.
Nearly every major petroleum company has put together a shale department staffed by geologists and engineers. The energy crisis is expanding and has become a key issue due to the increased gap in demand and supply and this could be met by a sustainable development of shale resources.
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