Master's Project (M.S.) University of Alaska Fairbanks, 2016This project examines the various drivers that led to the U.S. shale oil revolution in order to predict its place in the energy industry going forward and to analyze its effects on Alaska. The shale boom flooded the market with oil causing a dramatic decrease in crude oil prices in late 2014. With this price drop threatening to send Alaska into an economic recession, the future of shale should be of primary concern to all Alaskans as well as other entities that rely heavily on oil revenue. The primary driver leading to the shale revolution is technology. Advances in hydraulic fracturing, horizontal drilling, and 3D seismic mapping made producing shale oil and gas possible for the first time. New technologies like rotary steerable systems and measurements while drilling continue to make shale production more efficient, and technology will likely continue to improve. Infrastructure helps to explain why the shale revolution was mostly an American phenomenon. Many countries with shale formations have political infrastructure too unstable to risk shale investment. Capital infrastructure is a primary strength of the U.S. and also helps to explain why shale development didn't find its way up to Alaska despite having political stability. Financial infrastructure allowed oil companies to receive the funding necessary to quickly bring shale to the market. The final driver explored is crude oil prices. High oil prices helped spark the shale revolution, but with the recent price crash, there is uncertainty about its future. With production costs continually falling due to technology improvements and analysts predicting crude oil prices to stabilize above most project breakeven points, the future of shale looks bright.Introduction -- Shale & Alaska North Slope Crude Oil Prices -- Seeds of its own destruction? Technology -- Hydraulic Fracturing -- History of fracking -- Directional drilling -- History of drilling -- Benefits of directional drilling -- 3D seismic mapping -- Creating a shockwave -- Recording the data -- Interpreting the results -- The birth of a revolution -- Current/future developments -- Rotary steerable system -- Measurements while drilling -- Future developments. Infrastructure -- Political risk -- Financial markets -- Over investment -- Capital infrastructure. Crude prices -- The price crash -- Breakeven prices -- Future prices -- Alaska -- Conclusion -- Bibliography
