May 3, 2013

New technology revives old energy

Fossil fuels are experiencing a resurgence as technology helps companies access reserves.

By JONATHAN FAHEY The Associated Press

Technology created an energy revolution over the past decade -- just not the one we expected.

click image to enlarge

A worker monitors water pumping pressure and temperature at a hydraulic fracturing and extraction site in western Colorado. Hydraulic fracturing is the practice of injecting water, sand and chemicals to help access oil and gas deposits.

The Associated Press

click image to enlarge

This technology is used by the drilling operator to drill into the Marcellus shale at a well site in Washington, Pa.

The Associated Press

By now, cars were supposed to be running on fuel made from plant waste or algae -- or powered by hydrogen or cheap batteries that burned nothing at all. Electricity would be generated with solar panels and wind turbines. When the sun didn't shine or the wind didn't blow, power would flow out of batteries the size of tractor-trailers.

Fossil fuels? They were going to be expensive and scarce, relics of an earlier, dirtier age.

But in the race to conquer energy technology, Old Energy is winning.

Oil companies big and small have used technology to find a bounty of oil and natural gas so large that worries about running out have melted away. New imaging technologies let drillers find oil and gas trapped miles underground and undersea. Oil rigs "walk" from one drill site to the next. And engineers in Houston use remote-controlled equipment to drill for gas in Pennsylvania.

The result is an abundance that has put the United States on track to become the world's largest producer of oil and gas in a few years. Just Thursday, the U.S. reported that oil imports have fallen to a 17-year low.

The gushers aren't limited to Texas, North Dakota and the deep waters of the Gulf of Mexico. Overseas, enormous reserves have been found in East and West Africa, Australia, South America and the Mediterranean.

"Suddenly, out of nowhere, the world seems to be awash in hydrocarbons," says Michael Greenstone, an environmental economics professor at the Massachusetts Institute of Technology.

The consequences are enormous. A looming energy crisis has turned into a boom. These additional fossil fuels are intensifying the threat to the earth's climate. And for renewable energy sources, the sunny forecast of last decade has turned overcast.

This is the story of how technological advances drove a revolution no one in the energy industry expected. One that is just beginning.

THE RACE FOR NEW TECHNOLOGY

But while the national focus was on alternatives, the oil and gas industry was innovating too. New technology allowed drillers to do two crucial things: find more places where oil and gas is hidden and bring it to the surface economically.

Large oil companies such as Exxon, Chevron, Shell and BP turned up huge discoveries offshore in ultra-deep water with the help of better sensors and faster computers that allowed them to see once-hidden oil deposits.

Onshore, small drillers learned how to pull oil and gas out of previously inaccessible underground rock formations.

For most of the oil age, drillers have looked for large underground pools of oil and gas that were easy to tap. These pools had grown over millions of years as oil and gas oozed out of what is known as source rock. Source rock is a wide, thin layer of sedimentary rock -- like frosting in the middle of a layer cake -- that is interspersed with oil and gas.

An engineer named George Mitchell and his company, Mitchell Energy, spent years searching for a way to free natural gas from this source rock. He finally succeeded when he figured how to drill horizontally, into and then along a layer of source rock. That allowed him to access the gas throughout a layer of source rock with a single well. Then he used a process known as hydraulic fracturing, or "fracking" to create tiny cracks in the rock that would allow natural gas to flow into and up the well.

The United States, which was facing a gas shortage five years ago, now has such enormous supplies it is looking to export the fuel in large volumes for the first time.

(Continued on page 2)

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