Appalachian Basin

GE Uses Their Imagination For Shale Development

When one thinks of the company General Electric (GE), they think of innovation.  It seems fitting, then, that GE is increasing its role within one of the most innovative industries in the world: oil and gas.  In recent months GE’s oil and gas division has been making acquisitions and announcements to show they are committed to helping drive technological innovation in the oil and gas industry for many years to come.

Shale development has been described as a game changer for many years now.  The rapid development and improvement of technology being used has continuously provided operators with greater production numbers, all while increasing efficiency in the materials needed to develop each well.  GE recognized a potential for future innovation a few years back and decided, with the expertise they have, that servicing the oil and gas industry would be a proper fit for their future.  Since that time, GE has invested over $15 billion in their oil and gas division.

“This is a robust, dynamic industry that’s growing and ripe for technology infusion, and we think we can add a lot to it.” –GE Chief Technology Officer Mark Little (GE Pushes Fracking Research With Lab in Bet on Shale Gas, 4/3/13)

Just recently, GE announced a plan to build a $110-million research facility in Oklahoma City to study horizontal drilling and hydraulic fracturing.  The facility will employ 125 engineers and scientists to study how best to extract oil and gas from shale formations: 

“I think the important productivity driver of this era is shale gas. We have a big role to play in a big energy transformation.” — GE CEO Jeff Immelt (GE’s Jeff Immelt on leadership, global risk and growth, 5/17/13)

In addition to the research facility, GE has also made a few additional announcements in May showing their commitment to the oil and gas industry.

At the 2013 Offshore Technology Conference, GE unveiled their Modular Frac Manifold, which is a skid mounted manifold that allows simultaneous hydraulic fracturing operations on multiple well pads.  Each unit consists of a customized array of actuated valves, blocks and frac head outlets and is engineered to safely isolate each well during stimulation.  This efficiency will decrease time to hydraulically fracture a well, while helping to reduce well costs for producers.

Also in May, GE won approval from the Federal Trade Commission to purchase Lufkin Industries for $2.98 billion.  Lufkin makes artificial lifts for the oil and gas industry to help increase recovery from depleted oil and gas wells.  The approval by the Federal Trade Commission helps boost GE’s presence in the oil and industry with another avenue to provide services for the industry.

Oil and gas is quickly becoming an important part of GE’s portfolio.  In fact, oil and gas represents GE’s fastest growing segment with a 57 percent increase in revenue since 2009.  Thus, it’s easy to see why GE is so bullish on oil and gas development.  Currently, GE’s wide portfolio of products for the shale development encompasses nearly 40 technologies from across separate GE business units.

“Unconventional gas and oil production is a rapidly expanding global industry and is a strategic imperative for GE Oil & Gas.” — Ian Milne, President of GE Oil & Gas’s Pressure Control Business (Modular Frac Manifold aids shale gas field operators, 5/16/13)

Of course, GE is no doubt hoping that increased production of natural gas will help boost their aviation natural gas turbine business, which is located in Cincinnati, Ohio.  In recent years, GE has taken their knowledge of building jet engines and transformed the division into making some of the most advanced gas turbines with “aeroderivative” jet engine technology for use in natural gas utilities.

These turbines are being used in Ohio and across the United States as the country uses more natural gas for power generation.  Thanks to the increased use of natural gas in electric utilities,  U.S. carbon emissions have dropped to a 20-year low, something the environmental community should be very happy to know.

In the coming years, it will be fascinating to see what kind of innovation GE will provide to increased productivity to the nation’s already prolific conventional and unconventional oil and gas industry.  While providing expertise from the pad site to the natural gas turbines, GE will keep their imagination at work for a brighter future.

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