BP has started production at the Khazzan project in Oman, the largest of the new projects it has scheduled for this year, as the oil major attempts to export its US fracking experience around the world.
The $16bn gas project uses the same controversial drilling technique that has unleashed an energy revolution in the US. Fracking has been used to prepare around 200 wells that will tap gas three miles below the earth’s surface in extremely hard, dense rock.
Yeah, yeah, BP, engineering excellence etc.
And yes, I know, they’ve been fracking for oil in the UK for decades now.
However, there’s an important point about advances in extraction technology. Say that we’ve got a field or a well (Macondo? Sure, went wrong but….) in 5,000 feet of water and then deep under that. We work out how to drill and extract all the same. This does not then mean that we’ve got that extra oil from that one field or well. It means that we’ve, at least potentially, got all the oil that lies deep under the seabed in 5,000 feet of water.
Being able to frack gas in Pennsylvania does not just mean that the Henry Hub price goes down and the US chemicals industry booms. It means that we’ve the whole world to go explore again for gas deposits that can be fracked. Being able to process nickel laterites (something only worked out in the past couple of decades) does not mean that we’ve the nickel and cobalt output from Murrin Murrin. It means that all nickel laterites around the world are now potential sources of nickel and cobalt.
This is the bit about resource availability that the exhaustionists aren’t getting. Technical advance doesn’t just mean opening up the one deposit, it gives us a whole new world, another Earth, to go explore.
We can now hard rock frack three miles down? Great, so that’s the entire planet we can explore again for gas deposits in hard rock three miles down.
Or, as we might put it, technology creates new worlds for us.