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Shale Slakes American Thirst for OPEC Oil

We’re importing the least amount of oil from OPEC in 28 years, according to the EIA. The last time we imported this little from the petrostate cartel was way back in April 1987. Bloomberg reports:

In the past six years, U.S. production has increased dramatically, catching global markets off-guard and contributing to the crash in oil prices. Last year, the U.S. surpassed Saudi Arabia to become the world’s biggest oil producer.

America’s new oil, plus rising imports from Canada, has helped cut OPEC imports by more than half.

The cause of this dramatic change in our energy trade balance is no great secret, either. Hydraulic fracturing and horizontal well-drilling have unlocked oil and gas trapped in what was thought to be inaccessible shale rock, unleashing a flood of domestic production that unsurprisingly has the U.S. buying less crude from abroad.

This trend is what the Saudis are fighting when they continue to let oil prices drop. From their perspective, the world’s petrostates are seeing a market they perhaps took for granted upended by innovative new technologies. From ours, the American energy outlook appears very bright indeed.

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  • rheddles

    This trend is what the Saudis are fighting when they continue to let oil prices drop.

    You’ve confused Iran with a trend.

    • Jacksonian_Libertarian

      I agree, from the Saudi perspective this is about hurting Iran and Russia which are supporting the Shiite Jihadists, as opposed to the Saudi support of Sunni Jihadists.

  • FriendlyGoat

    Bloomberg has pointed out that the United States is actually using the least oil per dollar of GDP in more than 40 years. Shale production is cool, but we are actually reducing consumption too, are we not?

    • f1b0nacc1

      No, we are far, far more productive. The measure is per dollar of GDP, so if the consumption remains static while GDP climbs, the measure drops. This is a good thing, but it says nothing about our overall consumption.

      • FriendlyGoat

        Fortune had a piece in August 2014 suggesting that miles driven by Americans had been flat for about seven years. Lower prices now for gasoline may cause an increase in the future, but they cited other reasons, too, for reduction in growth of driving.

        • f1b0nacc1

          Yes, but the measure that you mentioned was based on consumption, it was based on consumption against GDP. Since the GDP has been growing and energy consumption has continue to expand, though I do believe it declined slightly last year, the measure would have declined anyway irrespective of American driving habits.

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