The United States is in the midst of an energy revolution.
Oil production has risen by 5 million barrels per day (bpd) since 2010, an increase of nearly 100 percent. New technology, particularly techniques in shale oil drilling, has opened up vast new opportunities for oil and gas companies.
The proof is in the numbers. In 2017, the United States averaged 9.3 million bpd. This year, the EIA predicts that U.S. oil and gas production will reach record levels, averaging 10.3 million barrels bpd to surpass the record reached in 1970 (9.6 million bpd).
In 2019, the EIA expects U.S. production to average 10.8 million bpd, which will allow the U.S. to rival Saudi Arabia and Russia as the world’s largest oil producer.
If there’s one big reason for the U.S. energy revolution, it’s that new technology has allowed American companies to beat the competition
Thanks to such innovation, a barrel of oil produced in the U.S. can cost as little as $20 to produce.
Not even OPEC could stop the host of American shale drillers, who persevered through a global production glut and historically low prices from 2015 to 2017, and who have now emerged victorious.
But the shale revolution is starting to reach its limits. With shale production likely to peak shortly after 2020, investors are looking for new, innovative technologies that will break new barriers to output.
Companies like Petroteq Energy Inc. are pioneering new approaches to energy extraction. While OPEC producers stick to the tried-and-true methods, American companies are exploring new horizons, watching production costs fall and profits shoot through the stratosphere.
A key area where advancements will be made is in oil sands, a sector most companies had left for dead. Thanks to Petroteq and other innovative firms, the technology to unlock clean, cheap oil sands could soon fuel the next chapter of the U.S. energy revolution.
Oil Sands: the Alternative Unconventional
Oil sands are deposits of bitumen, a thick and viscous substance that can be refined into petroleum products.
The potential trapped within oil sands deposits is staggering: the Canadian tar sands deposits in Alberta is estimated to contain 165.4 billion barrels.
In the United States, large deposits of oil sands bitumen remained untapped. In Utah, for instance, there are bitumen deposits totaling 30 billion barrels.
However, three things are holding back oil sands exploitation: cost, political opposition and environmental risk.
Producing from oil and tar sands had always been a costly enterprise. When prices fell in 2015, companies began divesting from their tar sands investments, cutting and running from oil that was now too expensive to produce.
In 2017, oil giant Royal Dutch Shell completed its divestment from the Canadian tar sands. After entering the unconventional drilling field several years before, Shell concluded that the cost to continue investment in Canadian tar sands was simply too high.
Other companies have done the same: investment in Alberta tar sands fields was dumped by Marathon Oil, Statoil and other companies.
Low prices and rising concerns over the “dirty” nature of tar sands production, which is believed to be one of the most carbon-heavy methods of energy production, fueled an exodus.
Oil sands gained a bad reputation as the dirtiest source of energy, which fueled a political backlash. News coverage of Canada’s oil industry has lately focused on how tar sands production is dirty, costly, destructive and ultimately non-economical. Opposition to new tar sands projects inside the U.S. has risen in recent years.
But that trend may be reversing. Despite divestment, bad press and lower-than-average prices, oil sands production will increase in 2018.
Advances in oil sands technology, and efforts to make the process cleaner and cheaper, means that the sector could be poised for a turnaround.
Petroteq Energy is pioneering safe and clean methods for unlocking oil sands assets. The company has two patents on technical methods for extracting oil sands in a way that avoids producing waste materials.
The company produced 10,000 barrels from its production facility in Utah in 2015 using its brand-new technology, and now it’s upgrading a second facility in Utah to increase its production capacity.
The company’s goal, according to CEO Alex Blyumkin, is developing “sustainability.” Proprietary methods allows Petroteq to extract oil sands without producing excess waste. By utilizing blockchain technology, the company cuts down on production costs and allows oil sands production to be more streamlined.
Petroteq has already found interested partners in Mexico, where it has signed a lucrative deal with national energy company Pemex for its blockchain-based management platform.
Other companies are getting in on the action as well. By following Petroteq’s lead, unconventional drillers are taking a second look at oil sands production.
Question of Cost
What made shale drilling in the U.S. so successful was the question of cost. At a time when oil prices were plummeting, American drillers used new technology to radically cut costs and maintain competitiveness. By 2017, shale drillers had reduced cost by as much as 42 percent.
Today, the average cost of a barrel of fracked oil varies between $20 and $50. That might look like a lot compared to cheap oil from Saudi Arabia or Kuwait, where per-barrel costs can be as low as $10.
But that doesn’t take into account “social costs” that OPEC states have to consider. The plunge in oil prices after 2015 placed immense pressure on OPEC states, which all depend on oil exports to maintain fiscal equilibrium.
Middle Eastern oil producers have endured immense pressure, while Venezuela was thrown into political and economic chaos by the drop in prices.
Social costs, according to a study by the Oxford Institute for Energy Studies, will increase the cost of OPEC oil in the coming years. While U.S. shale drillers can operate profitably with prices at $50 per barrel, OPEC countries ideally want $70 or even $100 a barrel to sustain their economics. This gives U.S. producers a massive competitive edge.
Now, thanks to technological advances from Petroteq and other companies, oil sands could be as profitable and as cheap as shale.
Through cleaner methods and blockchain-based management, Petroteq can produce for as little as $20 a barrel.
Petroteq’s methods can be licensed anywhere, and could release the billions of barrels locked inside oil sands deposits all across the American West.
If its technology catches on, oil sands could be the next big play in the U.S. energy revolution, ensuring American oil dominance for years to come.
By James Stafford
Kevin Jones is the lead editor for Nova Scotia Today.. Kevin has written for many publications including CBC Vanity Fair and Bleacher Report. Kevin is based here Halifax and covers issues affecting his city. In addition to his severe hockey addiction, Kevin also enjoys woodworking.