Peak oil-ers will hate to hear it, greens will decry it, and the world’s petrostates will turn green themselves (with envy) to see it, but the American crude boom is showing no signs of slowing down. In fact, according to the Energy Information Administration (EIA), field production of U.S. crude just hit its highest level in more than thirty years. Bloomberg reports:
The combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies from shale formations in the central U.S., including the Bakken in North Dakota and the Eagle Ford in Texas. The surge in production has helped push oil prices down 16 percent this year to a two-year low on Oct. 27. […]“U.S. crude production continues to grow strongly,” Katherine Spector, a commodities strategist at CIBC World Markets Inc. in New York, said by phone.
This booming production is, of course, thanks to the shale boom, which has remade the American energy landscape nearly overnight. Detractors have pointed to shale wells’ high rate of decline as evidence that this surge in output is destined to be short-lived, but week after week, month after month, those predictions are ringing more and more hollow.Declining oil prices are certainly a concern, however. If they continue to drop as they have in recent weeks and months, certain shale fields could cease being profitable to plumb. That said, the American shale industry was born of innovation—a combination of horizontal well drilling and hydraulic fracturing proved the key to unlocking previously inaccessible plays—and it continues to improve efficiencies and reduce costs. Bet against the U.S. shale boom at your own peril.