Future of Fracking
Chairman and CEO, ConocoPhillips
Excerpt from remarks to Boston College’s Chief Executives Club
October 22, 2015
TAKEAWAY: Future of Fracking
During this renaissance, clearly supply has made a big difference, and you’ve alluded to fracking. Given the caveat that nobody has a crystal ball, (a) What do you see the future of fracking in the U.S.? and (b) What is the future with other countries, and how might that impact us?
Good questions, so what’s the future of fracking? So the confluence of technologies that have led to this energy renaissance is this combination of horizontal drilling that the industry has done for a long time and this what’s called hydraulic fracturing, which is pumping water and sand down into the reservoir deep in the ground to basically crack open the rock to allow the oil and gas to flow into a wellbore and be produced up at the surface. We’ve done both those technologies for years, hydraulically fractured over a million wells in the U.S. since the 1950s. We’ve drilled horizontally for a long period of time. But the technology and the specialists in our business figured out how to put that together and drill very long horizontal wells in multiple stages of hydraulic fracture stimulation in the reservoir, and that’s what’s unlocked it.
The future, I think, is really pretty bright. I mean this confluence of technology has learned how to get oil out of rock that’s as hard as this podium that we didn’t even think was possible. And in fact our industry, over the last 10 years, people haven’t really put it in this kind of frame, but if you’re familiar with the North Slope of Alaska, Prudhoe Bay, which is the largest discovery in the U.S. in the last 50 years, our industry has discovered three or four Prudhoe Bays in the last 10 years because of the technology that we’re unlocking. So it’s critical to be able to keep doing that technology, do it sustainably, you know, recycle water so we can use it again in the process and reuse it.
Now, as we go internationally, what’s happened is we’re not the only country blessed with this kind of geology. It will move internationally, but it’s going to move slower, because they don’t have the fabulous infrastructure or the drilling rigs, the service industry that we have. And most importantly, they don’t have private land ownership. The land is owned by the governments, and the governments are restricting the access. And they don’t have the economic incentive. A person who owns, who lives on the land doesn’t get any economic incentive for people that are coming to develop some of the resources that exist underneath their land. It will move internationally. It will go that way. But it’s going to take a longer period of time, and it won’t ramp up as quickly. But it will be a source of supply over time, over time being 20, 30 years from now.