Shale Rock-Reason for oil boom in U.S

Shale is a fine grained sedimentary rock which is formed by the compaction of silt and clay size particles. Shale is composed of thin layers or laminae called fissility.Claystone is simliar in composition but does not contain fissility.

 shale Source rock

Shale is formed by the compaction process.The fine size particles which form shale remain suspended in water for longer time and deposit in low energy environment such as slow moving water, lakes, deltas.During the deposition of these particles, organic matter is also deposited which makes shale rich in organic content.This organic matter rich shale under high pressure and temperature is perfect for the hydrocarbons formation.That's why shale is considered as 'Source rock'.

Shale rock can have considerable porosity but generally have low permeability. Low permeability means low flow rate which makes it impractical to produce directly from shale.

Hydraulic fracturing is the solution to low flow rate problem in shale rock. Hydraulic fracturing basically creates artificial fractures with high permeability in the reservoir. This high permeability causes the flow rate to increase which makes it viable to exploit even shale rock.

U.S have high shale oil reserves and with hydraulic fracturing they are able to exploit them and increase their production. But hydraulic fracturing increases the production cost. Now oil price is around 50 $/bbl but the production cost of oil produced by hydraulic fracturing is higher due to which oil companies are running into losses. Now it is the matter of time when U.S oil companies realise the losses and reduce oil production and let the oil price stabilize to its normal value.

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