The U.S. shale fields are currently under the siege of diminishing productivity growth as the most viable acreage has already been exploited through fracking. This critical situation has arisen as a result of recent forward strides, made largely by two unrecognized companies. Their unique approach to the constraints of the industry drew on unconventional solutions, sparking conversations throughout the sector. But the question remains, will this be enough to combat the imminent demise of the shale fields or is a larger revolution required?
1. The U.S. shale fields are experiencing diminishing productivity growth, mainly due to the key regions already being exploited through fracking.
2. The current crisis resulted from strategies of two under-recognized companies, who implemented unconventional solutions to industry constraints.
3. These unique approaches sparked debates within the industry about their adequacy and need for broader changes.
4. Hydraulic fracturing or fracking, used to stimulate the flow of oil or natural gas to the soil surface, has been conducted on the most promising plots of land.
5. The companies are now dealing with diminishing returns from their remaining resources, indicating impending challenges for shale producers.
Despite advancements, U.S. shale oil productivity growth slowed to just 1.3% in 2019, down from 10% in 2018, according to the U.S. Energy Information Administration.
Growth in production from US shale fields is on a downslide, chiefly due to the fact that the prime acreage has already been subjected to the process of hydraulic fracturing, or fracking. This stimulates the flow of existing oil or natural gas in the underground rock formation to the earth's surface. Both companies recently revealed that they have already utilized the most promising plots of land for this purpose. Consequently, they are now faced with the issue of diminishing returns from their remaining resources. This stark revelation is suggestive of the impending challenges faced by shale producers.