New drilling techniques used to extract oil and gas from unconventional sources require much more energy than drilling traditional wells. Hence, one of the largest costs for a drilling company is the energy expended to drill. Many drilling sites are not connected to electricity grids, therefore many exploration and production companies have relied on diesel generators to power their operations. Certainly there has to be a better way? Well, Apache (NASDAQ:APA) Chief Technology Officer Michael S. Bahorich sees natural gas as a much more economical fuel.
About 1% of all drilling operations are powered by natural gas. By shifting all drilling operations over to natural gas, the industry could save as much as $1.6 billion a year. The idea has such appeal that both Haliburton (NYSE:HAL) and Schlumberger (NYSE:SLB) have said that they would be willing to test sites with Apache for free. In this video, Fool.com contributor Tyler Crowe talks about how the industry could convert to natural-gas-powered operations, and highlights companies to look out for that could benefit from this movement.