Natural gas prices are often linked to factors such as weather patterns, economic activity, storage levels, and even global disruptions like pandemics. However, one major influence on long-term energy prices receives far less attention: drilling technology.
Horizontal drilling, which involves drilling into a well vertically and then pivoting horizontally to follow a geological strata, has actually been around since the 1920s and 1930s. Hydraulic fracturing, or fracking, came next, with Halliburton successfully commercializing the practice of using high-pressure, chemical-filled water to fracture rock formations in 1949.
In the early 2000s, fracking expanded to multi-stage horizontal drilling, which led to another economic breakthrough in drilling efficiency. All of these advances over the last 100 years have helped lower the cost for suppliers to produce natural gas and petroleum products.
As we continue to see volatility in energy prices, the question becomes: what will be the next technological advancement that pushes suppliers forward in this century?
AI and the Future of Natural Gas Drilling
Like most industries, the future seems to be AI-driven alternatives. Autonomous drilling rigs are already in use by companies like Schlumberger, Caterpillar, and Halliburton. These rigs can operate with minimal human intervention, reducing the risk of on-site injuries while improving efficiency by eliminating downtime and operational delays.
AI is also being used to create virtual drilling environments that replicate real drilling sites, allowing companies to run simulations, test scenarios, and train operators. AI also optimizes energy use on the drilling site, reducing the need for wasted energy and flaring unused resources. This not only increases efficiencies, but can help to meet sustainability efforts by drilling companies.
Finally, AI is making it easier to model different geological formations and seismic impacts, allowing for more precise applications of methods such as hydraulic fracking.
Challenges and Adoption
Of course, with any major change there are hurdles to overcome. Job roles in the drilling industry will likely shift over time as automation and autonomous technologies become more widespread. Safety standards and government oversight will also need to evolve to ensure that federal and state regulations continue to be upheld.
Like many technological changes, the benefits and adoption will be gradual. While there are certainly economic efficiencies in these applications, the capital to implement and return on investment will vary.
In summary, the future of drilling and the technological advances ahead are exciting and may help bring lower costs for suppliers, allowing them to share those savings with consumers in the coming decade.