Shale companies are using hydraulic fracturing to harness a flood of new supplies of hydrocarbons. On the oil side of things, American production has surged from 8.5 million barrels per day (bpd) in October to nearly 9.3 million bpd today—a nearly 10 percent jump in just six months. As the EIA reports, much of that growth is being fueled by west Texas’s Permian Basin:
Crude oil production in the Permian Basin is expected to increase to an estimated 2.4 million barrels per day (b/d) in May, based on estimates from EIA’s Drilling Productivity Report. Between January 2016 and March 2017, oil production in the Permian Basin increased in all but three months, even as domestic crude oil prices fell. As production in other regions fell throughout most of 2015 and 2016, the Permian provided a growing share of U.S. crude oil production.
The last U.S. Geological Survey estimate pegged the Permian Basin’s riches at potentially more than 20 billion barrels of oil and 16 trillion cubic feet (tcf) of natural gas—a veritable bounty. That shale formation is the undisputed engine of this newest shale renaissance.
This oil rebound has come about as a result of OPEC & co.’s decision to cut output to help push prices back up—a move that has helped shale producers as much (if not more) than it has assisted those petrostates.
But natural gas output is surging as well, perhaps a more remarkable feat considering that American production of that hydrocarbon hasn’t suffered as much (though it has declined slightly) as a result of falling global prices. Even in the midst of this natural gas surge, new EIA data shows that natural gas production in the continental U.S. had its biggest monthly increase in February in almost three years. Reuters has more:
The 1.8 bcfd increase in February over January was the biggest monthly increase since April 2014 and the first monthly increase in three months…In Texas, the largest gas-producing state, output in February increased for the first month in 10, up 0.7 bcfd to 21.3 bcfd. That was the biggest monthly increase in the state since March 2011. […]
Today, the seven biggest U.S. shale fields produce more than 60 percent of the nation’s gas, while the Gulf of Mexico accounts for around 4 percent of the total.
U.S. shale still produces only a fraction of global oil and gas output, but that fraction is large enough—and has come on the scene quickly enough—to push supply past demand and help keep energy prices relatively low. At the same time, it’s given America more foreign policy options by bolstering our domestic energy security, and changing the tenor of the U.S. energy debate from one focused on scarcity to today’s paradigm of abundance.
We’re on the front foot with energy for the first time in decades, and though this isn’t exactly a zero-sum game, our gain has come somewhat at the expense of foreign regimes whose existence depends on hydrocarbon sales (looking at you, Russia). It’s easy to slide into complacency after hearing so much good news about our energy landscape over the past six years, but let’s not forget how much fracking means to the United States in the 21st century.