Trends in the North American Frac Industry: Invention through the Shale Revolution

Abstract

Hydraulic fracturing has been a part of oil & gas development in North America for seven decades. Hydraulic fracturing was first conducted in 1947. Commercial operations began in 1949. After over twenty years fracturing took a large step up in the late-1970s with its application to tight gas sand formations. The game changer that brought discussion of hydraulic fracturing to dinner tables, bars and sidelines of soccer games is the recent advances that enable commercial extraction of natural gas and oil directly from shale source rocks. Since the start of shale fracturing in the early-1990s, fracturing technology and the pressure pumping industry's efficiency in delivering fracturing services have changed almost beyond recognition. The result has been the world-changing Shale Revolution. Through researching industry databases, the authors have compiled an industry-wide review of North American hydraulic fracturing activity dating back to the first work done in the late 1940s. Yearly stage count in the 1950s through the early 1990s was 10,000 – 30,000 stages/year, while recent peak levels show a step change in activity aproaching 500,000 stages/year (Fig. 1). While the North American industry's fracturing horsepower grew about 10-fold between 2000 and 2018, yearly frac stage count grew 20-fold in North America and proppant mass pumped grew 40-fold. The authors show how the industry achieved a step-change in reducing service delivery cost through innovation and efficiency, allowing sustained economic development of unconventional resources at decreasing breakeven production costs. Technological changes, as assisted by a better understanding through frac diagnostics, integrated modeling and statistical analysis have enabled the large cost reduction to commercially produce a barrel of oil. As a result, shale frac designs have focused on higher intensity completions with tighter stage and cluster spacing, improved diversion through extreme limited entry perforation design and simultaneous and zipper frac'ing, increasing proppant mass per well, utilizing next-generation frac fluids to increase produced water recycling and using cheaper lower-quality proppant. At the same time, the environmental footprint of oil & gas production has been shrinking and will continue to do so as operational changes continue to make our industry a better neighbor, for example through faster well construction utilizing fewer pad locations, development of quiet fleets, greener frac chemistry, frac focus disclosure, etc. Together, oil and gas operators and their service providers have used technology & innovation to improve efficiencies and increase the overall daily pump time per frac crew. However, there is plenty of room for further improvements in technology and efficiency. We believe this is the first industry database of its kind covering hydraulic fracturing activity in the United States, going back to the 1940s. We hope this paper provides a unique perspective of how our industry has changed through the Shale Revolution.