Saudis Say, “If You Can’t Beat ‘Em, Frack ‘Em”

Saudis Say, “If You Can’t Beat ‘Em, Frack ‘Em”

It’s not that Saudi Arabia has the world’s largest reserves of oil or gas; the United States and Russia both have more. It’s that in Saudi Arabia, oil is so close to the surface, it’s much cheaper to extract than elsewhere. Stamp your foot in Saudi Arabia and you have an oil well.

Fracking was developed to get to hard-to-reach oil and gas. So it makes sense to read circulating reports that as domestic oil consumption is rising in Saudi Arabia, the kingdom is turning to fracking to release huge amounts of shale gas and export more of its profitable oil.

As IndustryWeek reported in the fall, the head of Saudi Aramco announced a deal where the state oil giant is to supply gas to a massive Saudi power plant project. “The world’s largest oil exporter launched an unconventional gas program in northern Saudi Arabia two years ago, as it sought alternative domestic fuel supplies that would allow an expansion of lucrative oil exports,” the article noted.

IW reported that Saudi oil minister Ali Al-Naimi estimated that the kingdom had 600 trillion cubic feet of technically recoverable shale gas. As IW noted, “With domestic energy consumption rising, Saudi Arabia has less oil available for the exports on which its economy depends, and shale gas is seen as a possible solution.”

But the huge problem the Saudis are running into is not one faced as direly by American frackers: Fracking requires a lot of water, and they simply don’t have enough. IW, indeed, noted that finding water is a “major challenge.”

For more stories like this visit Industry Market Trends

As was noted here in late August, fracking typically involves shooting a highly pressurized mixture of freshwater and sand or ceramics into an oil or gas reservoir several thousand feet underground, “often with the help of a small percentage of additives that aid in delivering that solution down the hatch,” as explained by officials from Halliburton, which drilled the first fracked well in the 1940s.

And it does require a great deal of water. Forum News noted that the oil industry, for example, used about 5.5 billion gallons of fresh water in North Dakota in 2012, citing the North Dakota State Water Commission as the source of info.

In fact, fracking uses such large quantities of water — it is technically called hydraulic fracturing after all — that industry journal OilPrice wrote recentlythat “figuring out how to help companies recycle frack water is an emerging business opportunity that could be worth countless billions.” But the journal conceded that “it still costs more to use recycled frack water in shale plays where water is plentiful and disposal wells numerous.”

In Saudi Arabia, the phrase “locally available water” doesn’t cover quite as much as it does in America. The concern there isn’t recycling it; it’s simply getting hands on enough water in the first place.

That the Saudis are concerned enough to give this thing a shot, however, is an indication that fracking in America has them worried. In July 2013, the Telegraph reported that Saudi Prince Alwaleed bin Talal, whom the British paper identified as “the country’s best-known global investor,” shook his finger at Middle East oil exporters and warned them that their business model “risks unraveling” as rich industrial states find ways of cutting their demand for inbound oil and gas.

Read More at ThomasNet

This article was originally published on ThomasNet News Industry Market Trends  and is reprinted in its entirety with permission from Thomas Industrial Network.  For more stories like this please visit Industry Market Trends.