Environmental Benefits of Learning curves in Fracking

... total drilling speed increases by 5%-15% for every doubling of experience.

Not only can these economies bring down the price of natural gas, but they also bring down the price of geothermal wells to to the point where they can produce electricity at comparable cost to natural gas.  Here's why:

Why Might Drilling Have a High Learning Rate?

Improvements in “fracking” have come from two primary sources - faster drilling and higher completion intensity. The pure drilling side (not including running casing and other non-drilling tasks) has a learning rate that could be as rapid as technologies like solar, wind, and batteries. It seems to keep progressing while fracturing productivity improves more slowly. Drilling speed increases see diminishing returns in shale wells as non-drilling activities dominate total construction time. Total rig productivity has increased ~50x-100x from drilling and completions since the earliest days in plays like the Marcellus Shale.

Few studies evaluate drilling speed learning curves, but they suggest that total drilling speed increases by 5%-15% for every doubling of experience. These numbers include running casing, cementing, and nippling up blow-out preventers, which are activities that improve slower than on bottom drilling. The drilling portion could have up to a 20% learning rate, though the uncertainty is high.

There are several reasons to think the learning rate is aggressive:

1. Feedback is constant, inexpensive, high signal, and instantaneous. You are making hole, or you aren’t. 
2. The supply chain is geared to rapidly iterate on bit, motor, and directional tool design

The manufacture of these items is surprisingly labor intensive, but that allows rapid iteration. Bit designs can have lot sizes as small as fifty units. Lot size can be even smaller for motors and directional tools. Bits, motors, and tools for drilling granite might improve speed and longevity several times in the most demanding applications.

3. Drilling is far away from physical limits.

HT:  MarginalRevolution.com