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machinery at every point in the extraction process, including machinery for drilling, casing and the completion of wells. Shale deposits are typically located at depths of 6000' (1830 m) or more below the surface, and are typically thin depending on their location. Consequently, horizontal drilling enables upstream operators to drill along the shale deposit, allowing them to access a large area of resources from a single well pad. Upstream oil & gas producers also demand high-quality


oil country tubular goods (OCTG), which consist of drill pipes, casing and tubing products. Tese products must be able to withstand high levels of pressure and be resistant to the corrosive characteristics of extracted products. Increasing hydraulic fracturing, horizontal drilling and in-situ extrac- tion usage has spurred demand in this product segment, and IBISWorld expects this trend to persist in the five years to 2019. Upstream oil & gas extractors are expected to continue demanding high quality OCTGs, and manufacturers of these goods are projected to benefit from such elevated demand in the next five years. While regulatory hurdles are anticipated to continue over


the five years to 2019, IBISWorld expects technology to adapt to increasing regulatory oversight and environmental require- ments. Te process of cementing and casing is essential in oil & gas production, and IBISWorld expects technology in this segment to become a primary focus moving forward. When a well is being drilled, whether horizontally or traditionally, the drill operator incrementally cements the annulus, which is the


space between a steel casing and the surrounding geological formation, to isolate the surrounding area from the extraction process. Increasing attention on the environmental impact of hydraulic fracturing and horizontal drilling is expected to encourage further development of the casing and cementing process; therefore, IBISWorld expects that this segment of machinery could experience a period of increased innovation during the five years to 2019.


Recovering Energy Markets Te Mining, Oil & Gas Machinery Manufacturing indus-


try supplies a variety of mining industries with necessary equipment for cost-effective mineral extraction. Environ- mental concerns regarding coal usage have only partially offset steady demand in the mining sector, and while these concerns are expected to persist in the five years to 2019, the US is still expected to rely on diverse sources of energy. Additionally, the 2011 accident at Japan’s Fukushima Daiichi nuclear power station has garnered significant attention from the nuclear power sector in the US. However, IBISWorld ex- pects that the impact of this event will not significantly offset demand for uranium mining operations in the United States over the five years to 2019. Te EIA anticipates that both nuclear and coal power


generation will maintain their relative shares of energy con- sumption in the United States until 2040. Coal, for instance, sustains one of the highest levels of energy return on


Energy Manufacturing 2014 13


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