Daniel Yergin: Technology Gives the World More Oil

by David Bier on January 9, 2012

in Blog

In this excerpt from his new book The Quest: Energy, Security and the Remaking of the Modern World, energy expert Daniel Yergin explains why technology continues to thwart doomsayers who claims the world will run out of oil. He shows how technology transformed the energy industry and just in time for the rising worldwide demand.

The Quest was released in 2011

[In the 1990s], technology was increasing the security of oil supplies–by expanding the range of the drill bit and increasing recoverable reserves. The petroleum industry was going through a period of innovation, capitalizing on the advances in communications, computers, and information technology to find resources and develop them, whether on land or farther and farther out into the sea.

So often, over the history of the oil industry, it is said that technology has gone about as far as it can and that the “end of the road” for the oil industry is in sight. And the, new innovations dramatically expand capabilities. This pattern would be repeated again and again.

The rapid advances in microprocessing made possible the analysis of vastly more data, enabling geophycists to greatly improve their interpretation of underground structures and thus improve exploration success. Enhanced computing power meant that the seismic mapping of the underground structures–the strata, the faults, the cap rocks, the traps–could now be done in three dimensions, rather than two. This 3-D seismic mapping, though far from infallible, enabled explorationists to much improve their understanding of the geology deep underground.

The second advance was the advent of horizontal drilling. Instead of the traditional vertical well that went straight down, wells could now be drilled vertically for the first few thousand feet and then driven at an angle or even sideways with drilling progress tightly controlled and measured every few feet with very sophisticated tools. This meant that much more of the reservoir could be accessed, thus increasing production.

The third breakthrough was the development of software and computer visualization that was becoming standard throughout the construction and engineering industries. Applied to the oil industry, this CAD/CAM (computer-aided design, computer-aided manufacturing) technology enabled a billion-dollar offshore production platform to be designed down to the tiniest detail on a computer screen, and its resilience and efficiency tested in multiple ways, even before welding began on the first piece of steel.

As the 1990s progressed, the spread of information and communications technology and the extraordinary fall in communication costs meant that geoscientists could work as virtual teams in different parts of the world. Experience and learning from a field in one part of the world could instantly be shared with those trying to solve similar problems in analogous fields in other parts of the world. As a result, the CEO of one company said at the time with only some exaggeration, scientists and engineers “would go up the learning curve only once.”

These and other technological advances meant that companies could do things that had only recently been unattainable–whether in terms of identifying new prospects, tackling fields that could not be developed before, taking on much more complex projects, recovering more oil, or opening up entirely new production provinces.

Altogether, technology widened the horizons of world oil, bringing on large amounts of new supplies that supported economic growth and expanded mobility around the world. Billions of barrels of oil that could not have been accessed or produced a decade earlier were now within reach. All that proved to be “just in time” technological progress. For the world appeared to be on a fast track in terms of economic growth–and, thus, in its need for more oil.


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