Soap is shale’s new secret weapon to boost U.S. oil output

Forget AI-assisted drilling, U-shaped wells and round-the-clock fracking. One of the hottest technologies to squeeze more oil from U.S. shale fields is better soap.

Companies have long used detergent-like additives, called surfactants, to coax oil from underground rocks in much the same way that dish soap lifts grease from dinner plates. But in the past few years, shale producers have discovered dozens of new methods to mix the surfactants with other chemicals to get a bigger boost in crude output — as much as 20%, in some cases — without a major increase in spending.

Upward of 90% of crude is left behind in shale wells, leaving a significant opportunity for producers to boost recovery rates. Brendan McCracken, chief executive officer at shale driller Ovintiv Inc., said in an interview that surfactants are a real “needle mover” for improving output, increasing Ovintiv’s oil productivity by about 9% compared with wells that hadn’t been treated with its new chemical mix.

The advances in surfactants are part of the industry’s years-long campaign to improve technology and lower costs, an effort that helped the U.S. to overtake Saudi Arabia and Russia as the world’s largest crude producer. More than a decade after the shale boom began, that push has become more urgent as many of the best drilling sites are tapped and investors pressure companies to keep spending in check.

That’s prompting some executives and analysts to warn that production from U.S. shale basins is on the cusp of peaking, which seemed like a distant prospect just a few years ago. Finding success with surfactants is key to not only boosting new wells’ production, but keeping older ones from fizzling out. Without that constant drive for innovation, there’s a risk that OPEC will start to take back the market share it lost to U.S. shale.

“The question that the oil company is always trying to ask itself is, ‘What’s the minimum amount I can spend on a surfactant to get the most out of my well?” said Richard Spears, vice president of oilfield consultant Spears & Associates.

Shale drillers are deploying a wide range of technologies in their drive for efficiency. Producers are using artificial intelligence to improve well planning and crude extraction — an effort McKinsey & Co. said could unlock $230 billion in annual recurring revenue for the industry — and drilling curved wells to pump more oil from narrow plots of land. But surfactants are also a major part of the move to cut costs and boost output.

Demand for surfactants in U.S. oil fields is expected to grow 29% by 2030 to 313 million gallons sold, according to Spears & Associates. The firm projects that oil and gas operators around the world will spend $1.7 billion on surfactants this year, with almost three-quarters of that outlay coming from the US, the largest market for the additives.

Out of an average $8 million total cost to drill and frack a shale well in the Permian, Spears estimates operators will spend about $200,000 on surfactants.

One sign of the chemicals’ growing importance is how often company executives are talking about them. They’ve been mentioned 90 times on earnings calls with investors since the start of this year, more than in all of the previous two decades combined, according to data compiled by Bloomberg.

Chevron Corp. discussed the topic in detail at a meeting with analysts in November and then again on its earnings call a couple of months later. The company is one of the biggest drillers in the Permian Basin of West Texas and New Mexico, the world’s most productive shale field.

Initial results suggest Chevron is able to get as much as 20% more oil over the first 10 months of a well’s life thanks to the various surfactant “cocktails” it’s trying out, Chief Financial Officer Eimear Bonner said on the call. The company started out with surfactants on about 40% of its Permian wells in the first half of last year, plans to reach 85% in 2026 and is aiming for the treatment to be used on all of its wells in the basin next year, Bonner said.

Diamondback Energy Inc. and Permian Resources Corp. have also said their test results for the technology are promising, though they cautioned that it’s still early days.

“Looking ahead, we will be watching the durability of these early gains as programs scale,” Arun Jayaram, an analyst at JPMorgan Chase & Co., wrote this month in a note to investors.

Environmental groups have raised concerns over the lack of transparency about fracking chemical mixtures, however. While many states require companies to disclose the chemical makeup of fracking fluid, companies often withhold the exact identities of the substances used, citing industry competition.

Spears & Associates says common shale surfactants include 2-Butoxyethanol, used in household cleaners and de-greasers, and lauryl sulfate, often found in soaps and shampoos.

The industry’s use of the additives is growing. Almost 10% of all new frack jobs are using surfactants, according to Select Water Solutions Inc., which has developed 26 new surfactant formulas for just one customer. And of those wells using the additives for fracking, 95% are in the Permian, Michael Skarke, chief commercial officer at Select, told investors earlier this month.

“There’s a lot of room for this market to grow,” he said. “But it’s increasing quickly. I mean, we’ve seen it grow 50% year-over-year, and we see that growth continuing into 2027.”

Locus Fermentation Solutions is another company cashing in on the surfactant boom. The closely held biotechnology company based in Ohio has already expanded its laboratory in the Houston area and is looking to hire more scientists. The company is on pace to triple last year’s revenue thanks to its surfactant sales, Chief Executive Officer John Uhran said in an interview at the company’s lab in The Woodlands, Texas.

“We’re growing very quickly,” Uhran said. “People are looking for surfactants.”

Beyond their use in new wells, surfactants are also being used by companies such as Devon Energy Corp. and Occidental Petroleum Corp. to boost existing production in older wells, a technique referred to as enhanced oil recovery. Carbon dioxide is also as part of the process to reduce the thickness of trapped crude and help bring it to the surface.

“Things like surfactant and CO2 can work together to further improve the results,” Occidental Chief Executive Officer Richard Jackson said this month on an earnings call. “For us, this is a growing story.”

Wethe writes for Bloomberg.