The domestic energy industry’s recent rise is the result of lower demand through energy efficiency and the rise in production of unconventional oil and gas discovered in underground shale formations. Horizontal drilling and hydraulic fracturing have made it possible to economically produce oil and gas from tight rocks. In Oct 2013, U.S. oil production reached its highest monthly total in the last 25 years. In Texas, with crude oil production of over 2.7 million barrels per day, two oil fields alone—Eagle Ford and Permian Basin—are on target to produce nearly 2 million barrels of oil equivalent a day in 2013.
However, while abundant, shale oil and gas can be difficult to locate and extract. Horizontal drilling and hydraulic fracturing processes are expensive and, some say, potentially harmful to the environment. Another relatively unknown fact—especially to industry outsiders—is that fracking is quite inefficient today: 80 percent of the production comes from 20 percent of the fracking stages. Today, horizontal drilling and hydraulic fracturing recover about 20 percent, probably less, of the oil in the shale rocks. According to PacWest, drillers will spend $31 billion in 2013 on suboptimal frack stages across 26,100 wells in the U.S. In response, some of the largest oil and gas companies are using big data analytics technologies to improve their exploration and production.
Big data analytics includes three categories: descriptive analytics, which tells you what happened and why; predictive analytics, which tells you what will happen; and prescriptive analytics, which tells you what will happen, when, why, and how to improve this predicted future.
Marketers, operations experts, financial officers and other business leaders have already used prescriptive analytics to improve customer experience, reduce churn, increase up-selling and cross-selling revenue, streamline logistics and enhance other important applications. For the oil and gas industry, prescriptive analytics can help locate fields with the richest concentrations of oil and gas, make pipelines safer, and improve the fracking process for greater output and fewer threats to the environment.