According to new EIA data released today, U.S. oil production surpassed 7 million barrels per day (bpd) last week for the first time since the first week of March in 1993, almost 20 years ago (see chart above). Compared to the first week of January last year when the U.S. was producing less than 6 million bpd, domestic oil output has increased almost 20% (and by more than 1 million bpd), as a result of the ongoing huge gains in shale oil production in Texas (now producing more than 2 million bpd as of October, double the state’s output just three years ago) and North Dakota (almost 750,000 bpd in October, a new state record).
And we can expect even more gains in crude oil output from domestic producers this year and in the future, here’s what CNBC is reporting:
“U.S. oil production continues to accelerate at a surprising rate, and the government now predicts the U.S. industry could pump 14 percent more oil this year alone. The use of non conventional drilling techniques in places like North Dakota and Texas has created an explosion in U.S. production to the point where the U.S. is expected to surpass Saudi Arabia in crude production by 2020, according to the International Energy Agency.”
MP: Today’s report from the Department of Energy that U.S. oil output is now close to a 20-year high, and the fact that the domestic output of crude oil has increased by more than one million bpd in just the last 12 months, is more evidence of the transformative effects that hydraulic fracturing and horizontal drilling are having on domestic energy production and the U.S. economy. It’s important to note that the dramatic increases in shale oil output in states like North Dakota and Texas are certainly not part of any intentional government energy policies favoring fossil fuels, and most of the increases in shale oil output are not taking place on government lands. For the significant increases in U.S. oil that have reversed a multi-decade decline in domestic output starting in about 2008 and have since brought oil output near to a 20-year high, most of the credit goes to private-sector enterprises, the widespread implementation of modern drilling technologies, private risk-taking investors, and private landowners. And as I’ve mentioned before, the timing of the fracking revolution couldn’t have been more perfect (as can be seen in the chart) – the U.S. economy received significant benefits from the huge energy-driven economic stimulus starting in 2008 as shale oil production ramped up, just as the U.S. economy entered the Great Recession. The U.S. shale revolution continues to provide one of the strongest reasons to be bullish about America’s economic future.