World energy outlook: Has fracking contributed to low petroleum prices?

What is fracking?

It is a technique that involves various technologies and processes and where the primary objective is to extract oil and natural gas. The technique simply consists of injecting at high pressure water with sand to the subsoil, specifically to the reservoir that deserves to be fractured, what happens with this fracturing fluid is that once it reaches the subsoil it increases the already existing fractures of the rocks of the reservoir that contains oil and natural gas.

This technique is explained above because it is important to understand the purpose of the application of fracking in the extraction of hydrocarbons, but above all to understand the reasons that led to the application of this method of hydrocarbon extraction, since in the last century there were sufficient energy reserves based on hydrocarbons, however when these reserves began to run out then it was seen the possibility of exploiting unconventional deposits, ie the deposits that can not be produced conventionally by methods that have already been tested and easily known in their applications.

In terms of energy, it has been seen how in the past there was a high yield in the exploitation of oil from conventional reservoirs, in which for example 1 barrel of oil was needed to extract 100 barrels of oil in production, however over the years this yield has declined, and in conventional reservoirs there has come to be a yield of needing the equivalent of 1 barrel of oil to only be able to extract 20 barrels of oil, all this translates from being able to generate abundant and cheap energy to having to see an increase in production costs.

All the reasons explained so far made it profitable to exploit unconventional oilfields by the fracking technique, especially in countries such as the United States of America, where practically more than half of the production is generated by the fracking extraction method.

What is the global energy outlook with the application of fracking?

Since the application of this technique (fracking) for oil extraction has been implemented, oil production has increased considerably, especially oil production in the United States of America, we are going through a world oil boom, however it is something that has not been evidenced in reality as a result of the pandemic of covid-19, on the contrary this high production has generated low oil prices, having OPEC and other countries to make decisions to reduce production quotas to try to level the prices of the world oil market.

Reference consulted and recommended

Fracking, the United States and OPEC