AMR Future Brief| Fracking for the Future by Navigating Industry Demand

Fracking, also known as hydraulic fracturing, is a method used to extract oil and natural gas from deep underground formations that are otherwise difficult to access. This technique involves injecting a high-pressure fluid mixture—composed of water, sand, and chemicals—into a wellbore. The high pressure creates small fractures in the rock formations (usually shale), allowing trapped oil or gas to flow more freely to the well, where it can be extracted. Fracking is majorly used in the production of shale gas, tight oil, and tight gas. 

Assessing technological Advancements—From Conventional to Current 

The use of hydraulic fracturing (fracking) began in the 1940s. The first experimental fracking operation took place in 1947 in the Hugoton gas field in Kansas, conducted by the Stanolind Oil and Gas Corporation. The process gained momentum after its early success, evolving from basic fracture stimulation methods to modern fracking techniques. In the early days, fractures were relatively small and the pressure and volumes were far less than what they are presently. Over the decades, the technique was refined, and by the 1990s, fracking combined with horizontal drilling became widely used, particularly in the shale gas industry. This combination has revolutionized oil and gas production, especially in the U.S., by making previously inaccessible resources economically viable to extract. 

Technological advancements in hydraulic fracturing (fracking) have played a pivotal role in enhancing the efficiency, safety, and environmental impact of the process. Below are some of the key advancements: 

• Horizontal Drilling: One of the most significant breakthroughs in fracking is the ability to drill horizontally through shale formations, rather than just vertically. After a well is drilled vertically to a certain depth, the drill bit is turned horizontally to extend through the shale layers. This allows access to a larger surface area of the shale reservoir from a single well, thereby significantly increasing the amount of oil or gas that can be extracted. 

• Multi-stage Fracturing: Multi-stage fracking involves dividing the well into multiple segments and fracturing them in stages, rather than trying to fracture the entire length of the horizontal well at once. This method allows for better control over the fracturing process and maximizes the amount of shale that can be accessed, improving efficiency and resource recovery. 

• Microseismic Monitoring: Microseismic monitoring technology allows operators to map fractures in real time. This is achieved by deploying sensors that detect the seismic activity created by the fracturing process. It helps engineers understand the behavior of fractures, ensuring they stay within the targeted reservoir and do not extend into unintended areas, such as water-bearing zones. This also enhances safety and operational control. 

• Waterless Fracking (Foam-based or Gas Fracking): Traditional hydraulic fracturing uses a large volume of water. Waterless alternatives like foamed gas fracking (using nitrogen or carbon dioxide) or gas-based fracking (using propane or other gases) have been developed to minimize water usage. This reduces the environmental impact, especially in arid regions where water is scarce, and minimizes concerns about water contamination and disposal. 

• Recycling of Fracking Fluids: New technologies have enabled the recycling and reuse of fracking fluids. After the fracking process, a significant amount of fluid returns to the surface (called flowback water), which can now be treated and reused in future fracking operations. This reduces the need for freshwater, lowers the environmental footprint, and reduces the costs associated with wastewater disposal. 

• Environmentally Friendly Proppants and Fluids: Research has led to the development of more environmentally friendly proppants (materials like sand or ceramic beads are used to keep the fractures open) and chemicals used in fracking fluids. For example, biodegradable proppants or nano-engineered proppants offer enhanced performance with reduced environmental risk. This advancement helps mitigate concerns about groundwater contamination and reduces the ecological impact of chemical additives. 

• Real-time Data Analytics and Automation: Modern fracking operations increasingly rely on big data and real-time monitoring systems to optimize every aspect of the process, from drilling to production. By using sensors, ML, and data analytics, operators can make faster, more accurate decisions, improving well performance, reducing costs, and minimizing environmental risks. 

• Enhanced Recovery Techniques: Enhanced oil recovery (EOR) techniques, such as using CO₂ injection or thermal recovery, have been integrated with fracking. These methods help to extract even more oil or gas from the well after the initial fracking process is completed. EOR can extend the life of wells, maximizing resource recovery and reducing the need to drill new wells. 

• Digital Twins and Simulation Technology: A digital twin is a virtual model of a physical system. In the context of fracking, digital twins are used to simulate the behavior of wells and reservoirs, helping operators predict how the rock will fracture and how fluids will flow. This allows for better planning and optimization of fracking operations, reducing costs and environmental risks by minimizing trial and error. 

• Advanced Materials and Equipment: New materials used in fracking tools, such as high-performance drilling bits and corrosion-resistant materials for well casings, have made operations more durable and efficient. These materials help reduce wear and tear, minimize operational downtime, and increase the service life of equipment, leading to more cost-effective and safer fracking operations. 

• Fracture Geometry Control: Controlling the geometry (shape and size) of the fractures has become increasingly important. Techniques such as zipper fracking and simul-fracking (simultaneously fracturing multiple wells) have been developed to maximize resource recovery. Improved fracture geometry control increases efficiency, allowing more oil or gas to be accessed while reducing the environmental footprint of each operation. 

 Fracking Technology Incorporation Analysis (2023) 

Source: Primary & Secondary Research and AMR Analysis 

The above figure depicts that the plug and perforation fracking technology witnessed the highest penetration, followed by sliding sleeves in 2023. In shale gas extraction, plug and perforation is used the most, which is mostly seen in wellbores (drilling rigs) mainly in the U.S. and other counties. In 2024, more than 480 rigs are active, which are involved in oil and gas extraction.  

This is attributed to the fact that the plug and perforation technology allows for precise isolation of multiple stages of the wellbore by placing plugs and selectively perforating specific sections. This stage-by-stage approach ensures better control over where the hydraulic fracturing fluid is applied, maximizing the effectiveness of each stage. Also, plug and perforation technology is highly adaptable to horizontal drilling, which is common in shale formations. It is easier to apply across various wellbore lengths, and stages can be adjusted based on real-time data. Operators can add as many stages as needed for long lateral wells, enabling customized fracking strategies based on geological differences along the well. The development of more durable plugs, perforating guns, and other downhole tools has contributed to the growing efficiency and reliability of the plug-and-perf method. Automation and real-time monitoring systems now allow operators to more accurately control perforation and fracturing, reducing the need for manual intervention and improving safety and precision. For instance, GEODynamics in February 2024 launched EPIC Precision™ and EPIC Flex™ top-loading gun systems of perforation technologies. This is a fully integrated gun system, which offers pre-packed telemetry, switch, and detonation for standard, self-orienting or refractory applications.  

To meet this demand, countries are turning to fracking as a way to access abundant reserves of shale oil and shale gas, which are critical in energy supply, especially for power generation and transportation. Significant reserves of shale oil and gas are distributed globally, with major deposits found in countries like the U.S., Canada, Argentina, China, and Russia. Countries are increasingly tapping into their unconventional resources to reduce dependence on foreign energy imports. The vast reserves make fracking a crucial method for unlocking these resources and increasing domestic energy production. 

Furthermore, continuous innovations in hydraulic fracturing techniques, such as horizontal drilling, multi-stage fracking, and microseismic monitoring, have significantly improved efficiency and cost-effectiveness. These advancements have made fracking economically viable in areas where it was previously too expensive or technically challenging. Lower costs and higher production rates have encouraged investment in fracking on a global scale. Many countries are seeking to reduce reliance on imported oil & gas, especially from politically unstable regions. Fracking allows nations to develop their own energy resources, enhancing energy security. The U.S. shale boom, for example, has reduced American reliance on foreign oil and helped turn the U.S. into a net energy exporter. The other countries, such as Argentina (Vaca Muerta Shale) and China (Sichuan Basin), are aiming to replicate this success to improve energy security. For instance, TAQA FRAC in September 2023 setup new operational facilities in Saudi Arabia and Northern Africa. In these facilities, TAQA FRAC offered new solutions to pump CO2-based foam acid fracturing treatments for treating low pressure/depleted reservoirs. This helps in improved effective half-length and higher gas recovery during flowback.  

Surge in Shale and Natural Gas Demand 

U.S. has vast deposits of shale gas, particularly in regions like the Marcellus Shale (Northeast), Barnett Shale (Texas), and Haynesville Shale (Louisiana). The U.S. Energy Information Administration (EIA) estimates that the U.S. has enough shale gas reserves to meet domestic energy demand for decades, making it a reliable and secure energy source. The shale gas boom has helped the U.S. drastically reduce its reliance on imported oil and natural gas. By tapping into its vast shale reserves, the U.S. has transitioned from being a net importer to a net exporter of natural gas, enhancing energy independence. The growth of shale gas production has also allowed the U.S. to play a more prominent role in the global natural gas market, particularly through liquefied natural gas (LNG) exports. 

The production of shale gas has led to an oversupply of natural gas, driving down domestic energy prices. Natural gas is now one of the cheapest sources of energy in the U.S., benefiting consumers and industries. Lower energy costs have given a competitive edge to sectors like manufacturing and chemicals, which rely heavily on natural gas for fuel and feedstock. Natural gas, including shale gas, is seen as a bridge fuel in the transition from coal and oil to renewable energy. It emits less carbon dioxide and fewer pollutants compared to coal and oil, making it a cleaner option for power generation and industrial use. The U.S. is a global leader in fracking technology and horizontal drilling, which are critical for efficiently extracting shale gas. 

NATURAL GAS DEMAND, 2023 

Source: Primary & Secondary Research and AMR Analysis 

As seen in the above figure, the production of natural gas is the highest in U.S. followed by Russia and Iran in 2023. However, it has been observed that China has the largest shale gas and natural gas reserve globally. Natural gas is one of the best alternatives to conventional fuel as they have low emissions. The demand for natural gas in different countries is still at a growing stage, with peak demand yet to be achieved. Rising energy consumption in emerging markets like China, India, and Southeast Asia is driving the demand for natural gas, including shale gas. These countries are looking to secure long-term energy sources to support industrialization, urbanization, and economic growth. Many countries with significant natural gas reserves, such as Argentina, China, and Australia, are looking to develop their domestic natural gas resources to reduce reliance on imported oil and gas. By developing local natural gas resources, nations can increase energy security, reduce their vulnerability to geopolitical risks in traditional oil and gas supply routes, and improve their balance of payments by reducing imports. 

Globally, countries are moving toward reducing carbon emissions and transitioning from coal and oil to cleaner energy sources. Shale gas, being a lower carbon fuel, plays a key role in this transition. Many nations see shale gas as a cleaner alternative to coal for power generation, as it emits up to 50% less carbon dioxide when burned for electricity. This makes it attractive as part of climate change mitigation strategies while renewables continue to scale. Innovations in fracking and horizontal drilling, largely developed and perfected in the U.S., are now being applied globally, making shale gas extraction more efficient and economical. These advancements allow countries to exploit previously inaccessible or uneconomical shale formations. As traditional oil and gas fields mature, countries are increasingly turning to unconventional resources like shale gas to diversify their energy portfolios. This diversification helps mitigate the risks associated with reliance on a single source of energy and provides more stability in global energy markets. Russia, known for its conventional gas production, is now exploring shale gas as a way to diversify its energy offerings and maintain a competitive edge in the global energy market. 

Fueling the Future 

With growing technological advancements, the energy needs of the population are bound to increase considerably to reach peak levels. To meet this demand, the oil & gas industry is anticipated to increase production and conduct numerous exploration activities. Fracking has revolutionized the energy landscape, unlocking vast reserves of oil and natural gas that were previously inaccessible, particularly in the U.S., which has emerged as a global leader in shale production. The technique has fueled economic growth, enhanced energy security, and played a pivotal role in the transition from coal to cleaner burning natural gas. Globally, as more nations recognize the potential of their own shale resources, the fracking market continues to expand, driven by rising energy demand, technological advancements, and the push for energy independence. In the evolving global energy mix, fracking offers both opportunity and responsibility, and its future will depend on balancing economic benefits with environmental stewardship. 

For further insights, get in touch with AMR analysts.