What Will Advances in Shale Oil and Shale Gas Bring to America?

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Just over 6 years ago, in 2008, when oil prices spiked to $147.7 per barrel, it was expected that American oil and gas production was going to be on a long term decline. From the perspective of energy supply security, it had been estimated that the US would be more dependent on imported oil and natural gas. However, thanks to the revolution in unconventional oil and natural gas, this anticipated outlook has drastically changed. With the invention of hydraulic fracturing and horizontal drilling, the US has been transformed from an energy-restraint country to an energy-sufficient country. What is more, just last year, the US even surpassed Russia as the world’s leading energy producer, and, according to the IEA forecast, Washington is expected soon to overtake Saudi Arabia as the top producer of crude oil.

With the advances in horizontal drilling and hydraulic fracturing (fracking), (in which the aim is to extract the oil and gas that is trapped in underground shale or other rock via the injection of high pressure streams of sand, water, and chemicals) the US natural gas production since 2010 has been boosted by as much as 25 percent, allowing the United States to overtake Russia as the largest natural gas producer. As the world’s top energy producer, the US, in the first quarter of 2014, extracted more than 11 million barrels of crude oil per day whereas Russia’s daily output remained at 10.53 million bpd and Saudi Arabia’s at 9.45 million bpd.  

With this shale oil and gas boom, the US has dramatically lowered American imports and has reduced Washington’s dependency on other major oil producers around the world. As a result, the share of US liquid fuels consumption that is met by net imports has now declined from 60 percent in 2005 to 33 percent in 2013, and is expected to fall further to 22 percent, the lowest level since 1970. Undoubtedly, significant annual investment that has reached a record of $ 200 billion has played the greatest role in spurring domestic US output.  
 

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