One of the best examples of the versatility of lignin products is found in the oil and gas industry. Lignosulfonates are used as thinners and dispersants to improve the flow and pumpability of drilling fluids and to help reduce water loss during drilling operations. The fluid system--sometimes called drilling mud--cools and lubricates the drill bit, prevents formation damage and removes rock cuttings from downhole. The drilling fluid is pumped down the drill pipe, through and around the drill bit and back to the surface through the annulus of the drilled hole. The fluid cools the bit and flushes cuttings from the bottom of the drilled hole to the surface. There the cuttings are separated from the drilling fluid prior to its recirculation downhole.Numerous types of drilling fluid systems have been used. Water-based mud systems are the oldest. The term "mud" originated because early drillers drove livestock into shallow ponds to stir up the clay pond bottoms and form a clay slurry. This slurry was used as the drilling fluid or drilling mud. As drilling became more sophisticated, finely ground bentonite replaced native clays in the water-based drilling fluids. Barite (naturally occurring barium sulfate with a specific gravity of approximately 4.3) was mined and finely ground for use as a weighting agent in the drilling fluid. The weighting agent was needed to counteract high downhole pressures to prevent "blowouts" of the column of drilling fluid. These high pressures are encountered due to depth and geological formation pressures exerted on water, brines and other fluids, including oil and natural gas. Around 1945, deeper wells were being drilled to tap the larger reserves of oil and gas. This made it necessary to weight drilling muds more heavily with barite and add more bentonite to suspend the barite and the cuttings. A consequence of heavier mud weights was higher pumping pressures resulting from denser fluids and increased fluid viscosity. Higher pumping pressures resulted in greater fluid loss into drilled formations and higher water loss from the drilling fluid. This water loss further compounded the problem of fluid flow. It became apparent that an improved drilling fluid was needed to increase the efficiency of drilling the deeper wells.Numerous additives had been tried as thinners for adjusting the rheological properties of the drilling fluids. Substances such as tannins, phosphates, lignites and lignite derivatives were in use. Quebracho bark was the principal organic thinner of the time, but it was not successful in contaminated systems or at high temperatures encountered in deep wells. Additionally, drilling service companies were faced with raw material inventory problems because each well seemed to require a different drilling fluid composition and different additive usage rates.Drilling experienced a substantial advance in 1947 when Dr. Barnes of the Sun Oil Company discovered that lime-precipitated lignosulfonates resulted in "breakover" of lime mud systems. The Milwhite Mud Sales Company bought the patent and licensed the use of the lime-based lignosulfonates for many years. Another major improvement was realized in 1953 through research conducted by Dr. Gray King and Carl Adolphson at the laboratories of Puget Sound Pulp and Timber in Bellingham, Washington. They determined that various metal salts of desugared lignosulfonates provided versatility and improved performance to many types of drilling mud systems.

By 1981, lignin products containing metal salts were used in water-based drilling fluids at a rate of 100,000 tons per year, with a sales value in excess of $40 million. One reason for the commercial success of lignosulfonate water-based drilling fluid systems is their relatively high degree of environmental friendliness. The lignosulfonate additives permit lower water usage, make it easier to recycle the drilling fluid and result in less waste upon completion of drilling. The oil and gas industry of the United States would not be as successful nor have grown as fast but for the versatility and improved efficiency of water-based lignosulfonate drilling fluids. Research to make these products even more efficient and environmentally friendly continues by oil well service companies, major oil companies and lignin and lignosulfonate manufacturers.