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Understanding the basics and economics of fracking can help investors understand the dizzyingly cyclical nature of energy markets.
But what exactly is it?
Hydraulic fracturing creates small cracks, or (FRACKING) fractures, in deep, underground geological formations to liberate oil or natural gas. The fluids that create the initial fractures is then mixed with thicker fluids that include sand and gelatin. These more compressed fluids lengthen the openings in the rock. When the fractures are complete, and pressure is relieved, the fluids flow back up the well where they are captured and stored for later treatment or disposal.
Fracking is shorthand for hydraulic fracturing, a well completion method that involves injecting water, sand and chemicals under high pressure through a well. The high pressure of all the components causes rocks to fracture and the sand keeps those fissures open, while the chemicals help ease the oil or gas out. The method itself has been around for decades, but the more recent development is the pairing of hydraulic fracturing and horizontal drilling.
This has allowed companies to start extracting oil and gas from less-permeable rocks such as shale, opening up vast new fields collectively called unconventional reservoirs. Conventional reservoirs, where extraction widely took place before the fracking boom, involve tapping into more permeable, spongier rocks, such as limestone, from which oil and gas flows, usually without artificial pressure.
Fracking has been groundbreaking for the U.S. and the world. Up until 2000, U.S. onshore oil-field development had stalled; fracking breathed life back into hydrocarbon production. In September 2019, the country became a net monthly exporter of crude oil and petroleum products for the first time since the U.S. Energy Information Administration started keeping monthly records in 1973.
https://www.fracnews.com/tag/fracking/
https://www.wsj.com/articles/fracking-from-breaking-shale-to-breaking-even-11608546780
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