Here's How Fracking Works

By Motley Fool Staff Markets Fool.com

Fracking has really taken off in the last few years, and technology is improving at a breakneck pace, allowing companies around the world to tap into oil that used to be totally inaccessible. So, how does it actually work?

Continue Reading Below

In this clip fromIndustry Focus: Energy, Motley Fool analysts Sean O'Reilly and Taylor Muckermanwalk listeners through the fracking process. Find out what steps frackers go through to make their drilling safer, how drilling technology has improved recently and what kinds of opportunities that opens up for drillers, and more.

A full transcript follows the video.

10 stocks we like better thanWal-Mart
When investing geniuses David and TomGardner have a stock tip, it can pay to listen. After all, the newsletter theyhave run for over a decade, the Motley Fool Stock Advisor, has tripled the market.*

David and Tomjust revealed what they believe are theten best stocksfor investors to buy right now... and Wal-Mart wasn't one of them! That's right -- theythink these 10 stocks are even better buys.

Click hereto learn about these picks!

Continue Reading Below

*StockAdvisor returns as of April 3, 2017
The author(s) may have a position in any stocks mentioned.

This video was recorded on April 20, 2017.

Sean O'Reilly:We've been doing this for a year and a half together. We've talked a lot about fracking. It's kind of all we talk about.

Taylor Muckerman:Well, it's what's disrupted the industry over the last decade or so, and it's what put American oil and natural gas back on the map.

O'Reilly:I have a good friend who's a petroleum geologist. I remember when he was in school 10 years ago, he gave a presentation about this, and I happened to be on campus. I was just passing through. He was talking about this and how revolutionary it was. He was talking about -- we're going to talk about it in a second -- drilling sideways and all this stuff. It was a big deal, and we hadn't been able to do that until recently. So,first and foremost, we need to clarify some terms. Fracking isactually what happens after a well is drilled. We've been drilling oil wells for over a hundred years.

Muckerman:Thetechnology there has definitely improved, but it's not what frackingis.

O'Reilly:Have youever been to Drake's Well,Pa.?

Muckerman:I haven't. That's the original, right?

O'Reilly:It'sso anticlimatic.

Muckerman:Yeah, I'm sure. Kind of like the geyser in Yellowstone. Whatever, dude.

O'Reilly:The actual well drilling, which, again, going down, we can now go 360 degrees around. That immediately makes any given oil well morevaluable. You used to just drill a holeand oil would come up, and that would be it.

Muckerman:Andyou would have to go straight down. But we're going up to 10,000, maybe even a little further down now.

O'Reilly:I saw this graphic, and they hadEmpire State Buildings down.

Muckerman:Yeah,multiple Empire State Buildings.

O'Reilly:Yeah,they had, like, five.

Muckerman:We can goover a mile horizontally once we'rea couple miles below the surface. We'renot just going straight horizontal anymore. We have directional drilling, whereit's basically like a video game --

O'Reilly:Does the bit do any dances,like a shimmy-shimmy?

Muckerman:Iimagine the movieTremors,with that big monster eating its way through the ground, andchoosing its path at will.

O'Reilly:Doyou think they saw the movie and thought, "We need to do that"?

Muckerman:Yeah. I mean,it's not doing spirals. It has to have some sort of straight direction to it,because they have to have the casings andcement tofortify it. But yeah, we're not just going at a 90-degree angle anymore.

O'Reilly:Correct me, but,basically, when they're doing all these drillsand the fracking, whichwe're going to touch upon in a second, a lot of what they do is tobasically make sure the hole stays in place and together.

Muckerman:Yeah,a lot of pipe anda lot of cement go into this process. The first thousand or so feet, I don't know,it depends on the water level, butthey have to protect them first and foremost.

O'Reilly:Andthat gets cased in cement.

Muckerman:It does. Theylower the piping down,and before they drill any further, they force cement down the hole, and wrapsaround the pipe at the bottom, and then upfills,and once it's cemented thenthey can use the drill bitto drill back through thehardened cement, and thenthey can continue drilling down to the oil and natural gas. First andforemost, they're protecting the water level.

O'Reilly:So they'remaking a thousand-foot straw out of cement.

Muckerman:Thewhole thing is a straw, but that's the most heavily protectedpart of the straw.

O'Reilly:OK,and that's so things don't collapse --

Muckerman:Well,that and so we don'tmess up the water table.

O'Reilly:Important also.

Muckerman:Yeah,so the oil and natural gas aren't seeping outinto the water table throughcracks in the casings. Basically, what you can imagine is,the top of this holehas the widest casing,and then they just putsmaller and smaller casingsdown through, so it's kind of like apolice baton when they snap it out.

O'Reilly:Right,or an inverted skyscraper. That'sactually a good analogy, the baton. Respect. So,hydraulic fracturing is the use of --this is what I got offline --fluid and material to create and restore smallfractures and rock formations. One thathopefully has oil and natural gas in it, of course.

Muckerman:Yes,you would hope. There'scompanies out there that help them arrive at that conclusion.

O'Reilly:Right. So,historically, youfind these geologic formations, and we know the types of rockthat usually have reservoirs of oil. That's easy.

Muckerman:Yeah,that's called conventional oil.

O'Reilly:Yeah,that's conventional oil, and it's easy. It's drilling a hole andThere Will Be Blood.

Muckerman:Big basins, generally long-lasting wells.

O'Reilly:Right. That's whatSaudi Arabia has with theirGhawar Field; that'swhat we're talking about here. This is going down there thousands of feet, and there's oil stuckbetween the tiniest of rocks. It's actuallycrazy to think about, that we're getting it out.

Muckerman:Yeah, it's thin layers that areseparated by sediment and rock. So they drop a wire line into these drilled wells and send anelectrical charge through this wire that then creates,like you said, a small explosion, and they do it over stages.

O'Reilly:Are you saying they'refracturing the rock, Taylor?

Muckerman:They are, they'refracturing the rock. Through the steel casing, and then through the rock, with pellets and things that diffuse reaction. They do it in stages. That'sone reason why we're producing more oil now,because we're being able to tighten the spacing, so we can have more stages per well. They frack, they plug, they frack, they plug, they frack, they plug. Then, once they've fracked all the stages, they remove the plugs, and then they start the process of forcing the fluids and proppants down into the fractures.

O'Reilly:This is likeputting a man on the moon. This is really complex.

Muckerman:Maybeeven more complicated.

O'Reilly:Youever hear the computers they usedfor the firstApollo 11,the originalGame Boy had more computing power than those computers.

Muckerman:Yeah,now you're just walking around with several of those in your pocket.

The Motley Fool has a disclosure policy.