The widespread adoption of hydraulic fracturing and horizontal drilling is completely changing the global energy landscape. Nowhere is that more evident that right here in North America. As E&P firms have begun "fracking" oil fields like the Bakken and Marcellus shale, the supply dynamics have shifted and the advanced drilling technique has unlocked a virtual sea of oil and gas. So much so, that WTI crude oil and natural gas inventories continue to build at record levels and some analysts have begun kicking around the idea of energy independence. For investors, the surge in unconventional energy production could be the biggest thing in the sector since Edwin Drake first hit oil back in 1859.

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Surge in Production
As energy demand continues to rise across the globe, exploration and production firms have stepped-up their efforts to tap non-traditional sources of supply. Aided by new drilling technologies, E&P have been able to access an abundance of hydrocarbon reserves never thought possible in the decades before. That's causing a huge shift in both supply/demand dynamics as well as political clout.

Speaking to OPEC's ministers in Vienna at their latest policy-setting meeting, ConocoPhillips (NYSE:COP) CEO Ryan Lance highlighted this fact when he said, "North America could become self-sufficient in oil as well (as gas) by 2025." Citing data from 1990 through today, that shows that unconventional drilling has raised proved reserves by more than 68%, the major integrated energy producer's statement shows how far unconventional resources have come.

Yet, some of the best growth may be ahead. The U.S. Energy Information Administration (EIA) predicts the growth in unconventional resources, such as oil sands, extra-heavy oil, biofuels, coal-to-liquids, gas-to-liquids and shale oil, will be nothing but spectacular. Overall, the group projects that production from these wells will grow by over 650% from 2003 to 2035, which is still more than triple today's levels. By 2035, unconventional liquids will be responsible for a sizable 12.2% of global supply. Analysts peg North America's potential production between 15-18 million barrels per day by 2035, up from 11.4 million in 2011.

That rising production and global reliance on unconventional assets to get their energy fix will ultimately benefit investors in various firms relating to the industry.

SEE: A Guide To Investing In Oil Markets

Betting on Unconventional Assets
Given the torrid growth that these fields will experience over the next few decades, investors may want to tilt their energy portfolios towards the North American unconventional players. Both the First Trust ISE-Revere Natural Gas (ARCA:FCG) and Market Vectors Unconventional Oil & Gas ETF (ARCA:FRAK) could be used as broad proxies for the energy subsector.

The First Trust ETF follows a basket of firms that derive a substantial portion of their revenues from the exploration and production of natural gas. That includes holdings in unconventional leaders like Cabot (NYSE:COG) and Range Resources (NYSE:RRC). Likewise, the Market Vector's fund expands its focus to include coal seam gas and bitumen production firms like Suncor (NYSE:SU). Expenses for the funds run a cheap 0.60% and 0.54%, respectively.

Tapping these assets requires some major technological expertise as well as some big bucks. With billions of dollars needed to find and extract oil in harsh environments along with growing demand, the oil services sector is poised to benefit long term. Tracking 45 different oil service stocks including Halliburton (NYSE:HAL) and driller Helmerich & Payne (NYSE:HP), the iShares Dow Jones US Oil Equipment Index (NYSE:IEZ) makes an ideal choice to play the vital subsector. Shares may be a value as well, with the ETF currently going for a P/E ratio of just 13 and around $23 below its 52-week high.

Finally, with hydraulic fracturing of unconventional fields requiring the use of millions of gallons of water and chemicals in order to crack the shale rock, disposing of these used fracking liquids and other waste created in the drilling process becomes a paramount issue. The firms with the PowerShares Water Resources ETF (ARCA:PHO) could see a boost as the water used in the process needs to be cleaned before returning to our aquifers.

SEE: Should You Buy Stock Or An ETF?

The Bottom Line
With the world demanding more energy, the E&P industry has taken a shine to unconventional assets as a way to meet those requirements. Production from such assets such as shale rock, oil sands and natural gas liquids plays, is set to explode upwards over the next few decades. For investors, that means betting on these unconventional players. The proceeding ETF picks, along with the Guggenheim Canadian Energy Income (ARCA:ENY), make ideal selections.

At the time of writing, Aaron Levitt did not own shares in any of the companies mentioned in this article.

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