U.S. Could Tap New Fields With New Drilling Technique

Oil production in the U.S. has been falling for two decades and the recent moratorium on deepwater drilling isn't helping matters, but there may be a viable alternative for boosting domestic crude production. Oil producers are investing billions of dollars to reach new oil reserves in California, Colorado, North Dakota and Texas -- most of which are onshore -- in an effort to bolster U.S. oil output. By 2015, oil executives and analysts say, the new fields could yield as much as 2 million barrels of oil a day — more than the entire Gulf of Mexico produces now, according to the Associated Press. Apparently, oil engineers are applying the lessons learned in the exploration of shale gas deposits and using horizontal drilling to find new oil deposits. Environmentalists have been critical of the process, known as fracking, which fills the hole with water and chemicals, forcing the shale to crack. That releases oil to the top. The technique could help the U.S. boost its oil production by 20% over the next five years and slash its dependency on foreign crude supplies in half over the next decade, the AP reported. Companies previously believed using horizontal drilling for oil wasn't economically viable and that it took too produce using the technique. That changed with some success with the methodology in the Bakken Shale. After success in Bakken, horizontal oil drilling has taken off in the Eagle Ford Shale in Texas. Now newer fields are showing promise, including the Niobrara, which stretches under Wyoming, Colorado, Nebraska and Kansas; the Leonard, in New Mexico and Texas; and the Monterey, in California, the AP reported. Chesapeake Energy CHK, the second-largest U.S. natural gas producer, is viewed as one of the pioneers of horizontal gas drilling, and the firm is looking for similar success with the technique as it moves toward boosting its oil production. Occidental Petroleum OXY, the fourth-largest U.S. oil company, is expected to use some horizontal drilling to tap into onshore fields in California and Texas-based EOG Resources EOG is also viewed as a viable player in the horizontal arena.