Report: Fracking nears full recovery
Hydraulic fracturing in North America has nearly recovered to pre-pandemic levels, but flaring levels remain historically low, according to a new report.
The number of new hydraulic fracturing wells across the U.S. and Canada in March reached 1,064, a 12-month high, setting the stage for oil production to rise in the second quarter, according to Norwegian energy research firm Rystad.
Meanwhile, oil production in the Permian Basin, Rystad said, has largely recovered from the February winter storm, which caused the largest disruption to U.S. oil production in history. Rystad said it counted 429 new hydraulic fracturing wells in the Permian in March, up from 260 in February and well above the 300 completions needed to maintain pre-pandemic output.
“The Permian was disproportionally hit by the Texas winter crisis in February and activity in the region grew significantly in March,” Rystad’s head of shale research, Artem Abramov, said in a statement. “The basin is set for production growth already in the second quarter.”
Rystad warned, however, that shale production could slow this year as OPEC ramps up production and uncertainty looms over highly contagious coronavirus variants, which threaten oil demand recovery. West Texas Intermediate, the U.S. crude benchmark, fell by 28 cents to $59.32 on Friday, as investors grew pessimistic over the rapid spread of virus mutations in Brazil and India.
Shale drilling isn’t alone in showing rising production. Traditional rotary drilling also has expanded in recent months, according to the weekly rig count from oil-field services company Baker Hughes and research firm Enverus. The U.S. added two rotary rigs this week bringing the count to 432, 77 percent more than the pandemic-low of 244 in August.
While oil and natural gas production ramps back up, flaring in major U.S. shale fields fell to its lowest level in four years during the first quarter — even as flaring in the Permian Basin temporarily spiked during the February storm, Rystad said.
Flaring is expected to rise from historically low levels as U.S. production ramps up. Carbon dioxide and methane emissions may remain at lower levels, Rystad said, because large publicly traded oil producers are focusing on capital discipline and reducing harmful greenhouse gas emissions.