U.S. crude oil production surged last week to the highest level in more than 15 years, reaching output of 6.5 million barrels per day for the week ending September 21 according to new data from the Department of Energy. Domestic field production of crude oil hasn’t been that high since the first week of 1997, see chart above.
America’s oil production has increased by about 30% over the last four years, as a direct result of new technological breakthroughs in drilling technologies that include hydraulic fracturing and horizontal drilling that have tapped into a bonanza of unconventional shale oil and natural gas. The biggest increases in domestic shale oil production have taken place in America’s top two oil producing states, Texas and North Dakota, and especially in the Bakken region of North Dakota and the Eagle Ford region of Texas.
Some energy experts are predicting that domestic oil production could increase by another 25-30 percent over the next five years and reach more than 8 million barrels per day by 2017. At the current pace of increases in domestic oil production, net oil imports will fall below 40 percent this year for the first time since 1991, and it’s also expected that the increased domestic oil production will put downward pressure on oil and gas prices going forward through the end of the year.
Welcome to America’s shale energy revolution – it’s one of the brightest spots in an otherwise bleak economic outlook, and one of the best reasons to be bullish about the future of the U.S. economy.