October 4, 2013

US in "early stages" of shale-industry growth

According to Platts, the U.S. is still in the early stages of growth in the shale industry.

According to Platts, the U.S. is still in the early stages of growth in the shale industry. Tens of billions more dollars are expected for infrastructure and development, according to an analysis by investment bank Credit Suisse. Drilling activity is strong and technology continues to advance, and Credit Suisse expects growth to occur in West Texas, South Texas, North Dakota, Montana and Colorado, among other areas.

A Credit Suisse analyst referred to the shale revolution as one of the most powerful investment opportunities of our time. “Using our model, we anticipate U.S. oil production to grow from 6.5 million b/d in 2012 too 11.3 million b/d by 2020,” analyst Arun Jayaram told Platts. He also cited the relatively undeveloped Utica Shale of Ohio as a prime opportunity for activity.

Credit Suisse expects the oil and gas industry in the U.S. to continue to grow, especially now that geological exploration and technology have caught up to demand and continue to improve. A decline in profits due to drilled-out wells appears to be many years in the future and not a present concern. Furthermore, enough geological exploration is taking place that analysts expect there will be new wells to drill quite a while before those that currently exist are drilled out.

Ohio oil and natural gas
William Kinney, founder of Summit Petroleum Inc., operates conventional and fracked wells in Ohio, Pennsylvania and New York. He is optimistic about the oil and gas industry's future in the Ohio area, just as Credit Suisse is. Shale energy is, according to Kinney, coming out of the first phase in tapping the Utica shale. Wells are still being drilled and production is lagging. Kinney also believes there will be deep underground reserves that will produce significant amounts of oil.

“The real oil leg has not been defined,” he told the Beacon Journal. “It will roll out. It will be more western and more northern.”

He also expects the shale to develop real wealth and subsequently jobs in the state of Ohio. Fracking and drilling appear to be the answer to America's energy future, according to Kinney. He maintains that the methods themselves are not unconventional, but that the results that have been obtained by American companies certainly are.

The potential of energy comes from equipment
America is well positioned to become a major exporter of liquid natural gas by 2030. This is due to the same technological advancements that have allowed the progress both Credit Suisse and Kinney remark upon. Fracking in particular has completely changed the way the energy industry works domestically. Other drilling techniques, too, are far more advanced and efficient than anything anyone could have imagined in years past.

This means oil and gas companies must pay attention to their equipment. If their current success depends upon advanced technology, their continued prosperity necessitates continuing to pay attention to how that technology functions on a day-to-day basis.

Companies should invest in the best components and services. Broadwind Energy's combination of precision gearing and gearboxes combined with a comprehensive suite of services enables oil and gas companies to get the most out of their investments.