Shale Oil and Gas Producers Look to Tanker Barges to Cut Costs

North American oil and gas production has surged to new levels in recent years, with shale-based exploration and extraction accounting for the majority of this activity. Thanks to a number of important and productive technological developments, shale formations can be plumbed for oil and natural gas much more economically than in the past. As a result, deposits that would not formerly have been financially viable have become profitable to work even at relatively low world market prices. In addition to the novel extraction technologies that help make this possible, producers and refiners are increasingly improving the equation further in other ways, as well.

As the source at this website points out, for example, the transportation of petroleum and natural gas can figure somewhat significantly into the overall cost of bringing it to market. While shale oil and gas extraction processes tend to be fairly costly in their own right compared to traditional approaches, many of these operations also lack access to the infrastructure that helps conventional wells keep their secondary costs down. Because a given shale production site will often only be viable for a few short years, it will also frequently not pay to invest in creating the kind of supporting arrangements to which an oil field expected to produce for decades would have access.

As a result, shale production often relies more extensively than other types of extraction on different means of moving the output to refineries and other destinations. In the past, that has generally meant loading petroleum or natural gas aboard North American railways, with the costs associated with this form of transportation at least being lower than those of the most common alternatives. Increasingly often today, however, shale producers are making use of other forms of transportation, instead, and sometimes saving as much as one third on their costs, in the process.

One American operator of tanker barges on inland waterways, for instance, has turned into a major cost-cutting avenue for quite a few shale producers. Even if the transportation in question might be slower than moving petroleum or gas by rail, the savings involved can help increase profits significantly or make particular operations viable at lower world market prices.