Despite the market decline, America’s shale boom is far from over. The U.S. Energy Information Administration (EIA) recently released new data showing that hydraulic fracturing has become more and more efficient since 2007. This means that, while rig counts have lowered from their record highs in 2014, crude oil production has barely experienced a dip, as a greater amount of oil can be produced from each well. According to the report summary:
“The average new well in each of these [tight oil] regions produces more oil than previous wells drilled in the same region, a trend that has continued for nine consecutive years.” (emphasis added)
The report also mentions:
“The total number of rigs in [Drilling Production Report] regions has fallen from a high of 1,309 in October 2014 to 475 in December 2015, a decrease of 64%, while the production levels in those months have declined by only 8% from their peak in March 2015.”
A global supply glut, spurred on by the Saudi Arabia led Organization of Petroleum Exporting Countries (OPEC), is making some question the longevity of the U.S. energy boom. But, thanks to American ingenuity and drive, producers are meeting these challenges head-on by using more efficient ways of producing oil: fracking and horizontal drilling. As the EIA report states:
“The increasing prevalence of hydraulic fracturing and horizontal drilling, along with improvements in well completions and the ability to drill longer laterals, has greatly improved well productivity.” (emphasis added)
This EIA report joins a long list confirming the resilience of the U.S. oil and natural gas industry, thanks to fracking. Whether it’s the over 100 percent increase in production in the Utica, “remarkable” production in West Virginia, or record production in the Permian, fracking is unlocking vast energy resources across the country. In fact, technological innovation is making fracking so efficient that BP recently predicted the U.S. will continue to lead the world’s tight oil production in 2035.
Thanks to continuing innovation in fracking, the U.S. oil and natural gas industry will not only survive, but prosper.