Final answer:
The cost of drilling a shale oil well using hydraulic fracturing can vary greatly but typically extends into the multi-million dollar range, influenced by various factors such as location and drilling depth. The wider adoption of fracking has reduced the price of natural gas and made new reserves available, although it remains environmentally controversial. State requirements for land restoration after drilling can also affect total drilling costs.
Step-by-step explanation:
Drilling a shale oil well using hydraulic fracturing, or fracking, is a substantial financial undertaking. The cost of drilling a single well can vary significantly based on several factors, including geographic location, the depth of the well, and the specifics of the hydraulic fracturing technique employed. Hydraulic fracturing involves injecting a mix of water, sand, and chemicals into a horizontally drilled well at high pressure to fracture the rock and release natural gas or oil.
The decrease in the price of natural gas due in part to the increased supply achievable through fracking has made it economically feasible to tap into previously inaccessible reserves. In 2010, the wellhead price of natural gas was $4.48 per thousand cubic feet, which dropped to $2.66 by 2012, influenced by the overall increase in supply from fracking. The environmental impact of this method has stirred controversy, but it continues to play a central role in energy extraction.
The exact costs for drilling can range from several million dollars to over ten million dollars per well, adjusting for inflation and industry developments. Companies operating in states such as Colorado are often required to restore the land after extraction, influencing the total costs of their operations.