Global supplies of oil and natural gas have spiked in recent years, and the resulting glut is making life very difficult for producers around the world. That’s especially true for the companies plumbing U.S. shale formations, because the relatively high cost of those fracking operations makes the industry particularly vulnerable to the bearish market. But while the short-term outlook for our domestic energy production has darkened somewhat on the basis of falling prices, the longer-term view looks rosier, as our proved reserves—resources deemed to be both technically and commercially viable—of oil and natural gas keep going up, up, up. The EIA reports:
U.S. crude oil and lease condensate proved reserves increased by 9% to 39.9 billion barrels, and natural gas proved reserves increased by 10% to 389 trillion cubic feet in 2014, according to EIA’s U.S. Crude Oil and Natural Gas Proved Reserves report. U.S. crude oil and lease condensate proved reserves reached the highest level since 1972, and natural gas proved reserves surpassed last year’s record level. […]
Texas had the largest increase in proved reserves of crude oil and lease condensate, representing 60% of the nation’s total net increase in 2014. This increase was driven by development of tight oil plays (e.g., Wolfcamp, Bone Spring) in the Permian Basin and the Eagle Ford Shale play. North Dakota had the second-largest increase, 362 million barrels, which came mostly from the Bakken tight oil play in the Williston Basin.
This hydrocarbon bonanza comes to us courtesy of—what else?—shale drilling, and the fracking industry continues to defy analyst expectations in its ability to keep oil and gas production up, despite prices falling to levels many believed would put shale firms out of business. Companies are busy innovating and iterating processes, using the same experimental attitude that unlocked shale in the first place to pump more oil and gas for less time and money. Thanks to those efforts, our proved oil and natural gas reserves are hitting some very high water marks.