The shale gas revolution has seen the United States turn around its bleak energy position from a massive importer to a future of self-sufficiency within the next two decades. This revolution was achieved on the back of the right set of conditions above ground, enabling the development of the resources below ground. And the boom is set to continue. North America is forecasted to dominate the field for years to come before other nations finally start to produce shale gas and the emerging shale oil resources – also known as tight oil.

This international growth will also offer opportunities to transfer knowledge and technology developed in the United States to foreign markets. Many of the companies expanding in North America and globally require satellite services to deliver masses of data to central headquarters from where decisions can be made. Satellite is needed to streamline drilling operations and speed up decision-making, which helps to control costs and improve efficiency.

State of Market

“Shale has been a strong growth segment in the whole oil and gas industry. It constitutes a paradigm shift in the industry,” says Dennis Smith, director of corporate development at Nabors Drilling. The use of shale drilling techniques has now also been adapted for shale oil plays; both reserves will hold potential for operators, drillers and contractors alike, says Smith.

Companies such as Nabors can benefit from the experience they have gained in the shale sector and be part of the transfer of techniques and technology to other regions of the world. Since this resource is found in all geological basins around the planet, if the shale layers contain oil and gas – given the right geology – there is potential for commercial production anywhere with the appropriate above-ground conditions.

Don Happel, Shell’s field telecommunications manager, says that the shale sector remains important to his company, as does communication between multiple sites. “The shale sector continues to grow presently. I would of course expect there would be demands across the full spectrum of oil and gas field services,” Happel notes about Shell’s needs in the market. “Both high and low resolution video transmission continues to be one of our growth demands. Enterprise-wide universal collaboration tools are particularly seen as having considerable growth potential in our networks.”

For Keith Johnson, president of Global Energy Solutions, Harris CapRock, shale is “definitely a growth area” for the company; “and we’ve got quite a few things underway,” he says. Johnson sees this growth as an opportunity to expand geographically in North America and beyond. In fact, Harris CapRock has already recently expanded into domestic markets in South Texas, North Dakota and parts of Pennsylvania. This growth in the North American shale sector has seen the company move much more into onshore drilling from a previous position of mostly offshore work.

As Harris CapRock establishes its shale services, it is also looking to expand into new markets. “There is a lot going into setting up in Brazil,” Johnson says. The company is hoping to apply its products and services directly to Brazilian plays, which are in remote locations. For this, bases will need to be set up to maximize the offering and control costs of constantly transporting employees and equipment to and from less remote areas. In many places, this will be facilitated by satellite communications.

Real-Time Drilling

The vast number of wells that are needed to be drilled for shale plays means real-time drilling centers are an essential tool for companies, as they allow operators to gather the high volume of data produced from many locations around the world in one place. From this information hub, the data can be evaluated by a team of specialists who can decide on the best plan of action for numerous wells without the need for travel – this saves both time and money and makes drilling operations more efficient and cost effective.

“Real-time drilling telemetry is assumed to be a standard application at all of our drilling locations these days. The back-office management and accessibility of collected data has grown exponentially as well,” says Happel.

Bandwidth Needs

Johnson says that shale customers, like many others, want more bandwidth for turnkey requirements, such as video, which he believes is a growing need for onshore shale bases. Video use will increase due to safety requirements, such as spills and leaks monitoring, cameras on drilling floors and the growing demand for video monitoring of instruments and gauges at bases and drilling floors.

Johnson notes that the gauge monitoring niche market could continue to grow significantly. Harris CapRock is looking at ways to use bandwidth more efficiently such as automation and enhancing video services. “It all depends on the customer, but the target of between 15 percent and 20 percent in increased efficiency could be achieved if we use applications better,” says Johnson.

VSAT Challenges

“The inherent delays in geosynchronous satellite communications are a challenge for interactive applications, in addition to the high cost.” Happel says. “I have seen favorable price differentials in bands, such as Ka- and C-bands, which can provide higher bandwidths as an alternative to the already congested Ku band.”

For Johnson, “it comes down to the continuing need for increased bandwidth at a reasonable price.” He adds that usually satellite bandwidth costs more onshore than other sources. While satellite can be the only choice in many cases, the growing use of fiber optic cables means that price control must remain a strong focus for satellite suppliers.

LTE Competition

Harris CapRock now provides an auto roaming LTE offering to its customers. The system works by automatically using LTE when the coverage exists and operating on satellite when LTE is not available. Until recently most land drilling locations were accessed by satellite only, which is more expensive than LTE. The option of automatically switching to LTE once it is detected can help keep costs down.

Customers are demanding a seamless transition of communications systems when making the move from exploration drilling to production activity. While this represents a change in bandwidth demands and sometimes a decrease in needs, the key point is that the transition must be seamless. According to Johnson, LTE backup offers that reassurance. He notes that LTE offers higher bandwidth while keeping costs down and many suppliers are looking to gain more LTE coverage for future applications, which stokes up strong competition to satellite options.

But given that many shale drilling and production sites are often remote, it is likely that in a variety of terrains satellite will continue to be the default bandwidth supplier. This will be true for the United States in the coming years and also many international plays that are forecasted to start developing reserves around 2020 and beyond. For example, China and Russia cover vast areas with a variety of remote locations offering many different hostile environments in a diverse range of topographies. This can provide challenges to communication and the satellite industry comes into play to provide the bandwidth that is required to cope with the large volume of data that needs to be sent to from these locations.

Customers are demanding a seamless transition of communications systems when making the move from exploration drilling to production activity.

“All of our rigs around the world have satellite capabilities and offer real-time monitoring of equipment and downhole parameters,” says Smith. He notes that around the clock monitoring of all equipment and activity on the drilling floor, including downhole conditions, is vital in today’s industry.

Nabors uses a great deal of video for its monitoring and requires a lot of bandwidth, with its needs set to grow. Smith says that the move to one centralized hub is commonplace now. Whereas it used to be the telephone that operators relied upon, now it is the computer and video screen, with the use of video forecast to increase, as it is the best way to improve efficiency and provide security and safety services. He says that the main technical challenges to the shale drilling sector right now are reservoir evaluation and completion tools, which are used to finish the well and ensure it achieves optimum production rates. The satellite industry can help with these challenges by providing enough bandwidth to transfer data that can be used to improve tools and techniques.

Importance

Christof Rühl, group chief economist at BP, said during a presentation of the company’s Energy Outlook 2030 in London in January, that shale gas, as well as the upcoming tight oil which is found in similar places, will be the resources that make North America energy independent by 2030.

He said the shale gas revolution in the United States came about because of “the never ending story of finding new technologies and new supplies, which were not accessible before.” Satellite communications have been essential in fuelling this boom and will help to maintain it too.

“Production increases will more or less remain concentrated in North America, even though the resource base is global. Why is it concentrated in North America? Not because the resources are concentrated there but because the above ground conditions in North America are right to develop new technologies and to produce these resources,” Rühl says. “It is competition; it is a place which has free entry. Everybody can go and invest there, and that breeds competition, which in turn breeds those technologies which gave us shale gas and now gives us tight oil.”

The United States also has a vast oil field service market that supplies operators with rigs, tools, and services that enable drilling to continue at the rates required. For instance, the United States has around 1,800 land rigs and drilled approximately 10,000 shale wells in 2012 alone.

International Growth

Rühl said the next countries most likely to join the boom in shale gas and tight oil are China and Russia, although 73 percent of shale production in 2030 is still expected to come from the United States.

Russia and China have strong oil service sectors that can provide the rigs needed to drill the vast number of wells needed to kick-start their shale industries. Russia is expected to be producing around 1.5 million barrels per day of tight oil by 2030, with China set to achieve a rate of around 500,000 barrels per day.

According to BP’s report, through 2020, the United States will see supply of tight oil grow by approximately 4 percent a year and tail off between 2020 and 2030 to nearer 1 percent as other countries move into the sector during this decade. Additionally, shale gas supplies are expected to meet 37 percent of the world’s growth in gas demand and account for 16 percent of world gas and 53 percent of U.S. gas production by 2030.

The next two countries tipped to follow the shale path are Canada and Mexico – both close to the United States and a good fit for companies to transfer their services directly to these plays. Europe and the rest of Eurasia are forecast to be the next areas to build their shale gas and tight oil markets.

Fracking

In the United Kingdom, one company is ahead of the curve and looking to start production of shale gas within two years. In December 2012, the U.K. government gave Cuadrilla Resources the green light to resume fracking in Lancashire, northwest England, following a suspension of operations in 2011 after minor tremors were caused by early fracking work undertaken by the operator.

“Currently, Cuadrilla is planning to conduct test drilling on a couple of wells in 2013 in the Lancashire area,” says Cuadrilla spokesman Andy Holdsworth. “Any test drilling is unlikely to occur until the middle of this year. Ideally, we’d like to start commercial extraction of shale gas in Lancashire by 2015. However, there’s a lot of work to do beforehand.”

The challenges of fracking in a new play will mean gaining data and learning quickly from experiences – just as happened in the United States. “Shale gas represents a promising new potential energy resource for the United Kingdom,” says the U.K.’s Energy and Climate Change Secretary Edward Davey. “It could contribute significantly to our energy security, reducing our reliance on imported gas.”

On the back of its progress in the U.K. shale market, Cuadrilla has been reported to be in talks with British utility Centrica to sell a significant stake of its equity to the big hitter.

However, some European nations remain unconvinced about fracking. France and Bulgaria, which hold some of the continent’s largest shale gas reserves, have total bans on fracking. This could mean that Europe as a whole could be slower to join the shale revolution than other regions.

The Future is Bright

The world remains reliant on oil and gas to fuel economic growth. Up until recently forecasts over the last decade or so were of dwindling global supplies, causing great concerns for many countries. While emerging economies will still require huge energy consumption and therefore costly imports, the good news is that the projected growth in world energy supplies, offered in no small part by shale gas and tight oil, is expected to meet this demand up until 2030 and beyond.

Therefore, the growth of the shale industry will not only remain strong, it will continue to grow in and beyond the United States. This will create a larger global market for the transfer of data around the world that will enable drilling bases, drilling decks, real-time drilling room and headquarters to remain in contact at all times.

Satellite communications will play a significant role in moving this data to and from customers, with improved efficiency as the key to offering increased broadband at competitive prices.

The next two countries tipped to follow the shale path are Canada and Mexico – both close to the United States and a good fit for companies to transfer their services directly to these plays.