I would say that the oil and gas industry has already had a revolution, which, at least in some places, is bringing the industry and its oil production to new heights.

In 2005, the gas price in the Unites States was around $9 / mcf when the shale gas revolution really took hold. Multi-lateral completions had become common-place, and fraccing techniques for shale had been in development for 20 years by Mitchell Petroleum, but the revolution really began to change things around 2005. At that point the ratio of rigs targeting gas as opposed to oil was around 80 / 20. The USA was importing 62% of its oil. By 2009 – 2010, shale gas production had become so successful that a glut ensued, and the US gas price collapsed to around $3 / mcf.

Producers had to react, because at that price they were losing money, with breakeven being $5 - $6 / mcf, depending on the basin. From 2009 / 2010 operators switched towards targeting basins or areas within the basin where oil or condensate was also produced. The result is that today, the ratio of rigs targeting gas as opposed to oil in North America is 20 / 80 – in other words a complete reversal. US liquids production (oil and condensate) began to sky-rocket. The US Department of Energy has just reported that oil production hit 8.16 million barrels of oil per day (bopd). This is an increase of over a million bopd in comparison to January 2013, the largest increase in US production since Colonel Drake discovered oil in a Pennsylvania borehole in 1859. Considering liquids production, the US has been the largest producer on the planet for 11 consecutive months. The USA is importing only 37% of its oil requirement, and in terms of energy it is 84.5% self-sufficient. The biggest changes have occurred in North Dakota and Texas where respectively the Bakken and the Eagle Ford shales have had the largest impact. However, the Permian Basin in Texas as well as productive shale basins in Colorado, New Mexico, Oklahoma, Utah and Wyoming have also been influential.

As noted above, the horizontal drilling / fraccing revolution resulted in the collapse of the US gas price and a re-direction of exploration and production strategy. The more recent increase in oil production may well have an effect on global prices, although so far, this has not been the case.

Probably a less easily defined revolution has already been taking place, and again it has to do with the development and deployment of new technologies. In the 1960’s to 1980’s, the industry had a discovery ratio of around 1 well in 10. With the application of a range of technologies in seismic acquisition and data-processing, and in the handling and application of well data, the industry discovery rate is now closer to 1 in 5.

People have been concerned about the dilemma of peak oil, or the fact that global oil production may peak, and thereafter decline. The issue was first brought to general attention by King Hubbard, a Shell geologist who predicted that US oil production would peak in 1969. He was very close to correct, as it appeared that US production had peaked in 1970. This issue may well have part of the reason for the run-up in oil prices from 1999 to 2008. However, as history has shown (and as outlined above) US production is reaching levels last seen 25 years ago in 1989, and is fast approaching a new peak.

So, I would contend that a revolution has already occurred. It will keep on going, as the deployment of new technologies changes the industry even further.

Sir!

Is there any contribution from Coal bed methane?