The United States produced 9.62 million barrels of oil per day last week, according to data published Wednesday by the U.S. Energy Information Administration (EIA). This is the highest ever daily oil output in any week since tracking of such data began in the early 1980s, surpassing the previous record of 9.61 million barrels per day (mbpd) set in June 2015, according to CNBC.
This new production record arrived earlier than some experts forecasted and underscores the resilience of U.S. producers still dealing with relatively low commodity prices. In 2016, the International Energy Agency (IEA) predicted that U.S. oil production would reach an “all-time-high” by 2021, but only after a mild downturn extending into 2018. With shale growth moving along faster than many anticipated, the IEA’s prediction proved to be a bit too conservative.
In recent years, shale oil production has surged, and a bevy of new wells have been drilled in states spanning across the country. As the EIA has noted before, more than half of U.S. crude oil is being produced from newly drilled wells, nearly all of which utilize hydraulic fracturing and horizontal drilling in shale formations. In fact, U.S. shale oil production is expected to hit a record 6.1 mbpd this month.
The shale revolution is so pervasive that the EIA has forecasted that overall U.S. oil production will approach an all-time record 9.9 million barrels per day in 2018. Even OPEC has reluctantly come to the realization that increased U.S. shale production is an unstoppable force, projecting that U.S. shale oil production will reach 7.5 mbpd in four years, driving up overall U.S. production up another 3.8 mbpd from current levels through 2022.
Oil production isn’t the only soaring trend attributable to the shale boom. Just a week ago, U.S. crude oil exports also hit a new record of 2.13 million barrels per day.
U.S. natural gas production is surging too, especially in the Appalachian Basin. In 2016, Pennsylvania rose to become the country’s second largest producer of natural gas, and EIA reported that Pennsylvania production has reached record highs. Pennsylvania’s neighbor, Ohio, has seen similar growth rates. Ohio gained 43 percent more gas production in 2016 over the prior year, with one county in particular – Jefferson – experienced a whopping 587 percent increase in the same timeframe. Numbers like these have led BP to predict that the U.S. will dominate natural gas production and LNG markets by 2035.
So what are we Americans getting from all this oil and gas production? For starters, our federal government is getting a budget boost without raising taxes on individuals and families – and many state and local governments are too. Oil and gas production on public lands supports 638,000 jobs across the country. New Mexico added $1.6 billion to its state budget in 2016 thanks to oil and gas tax revenue, and county governments in Ohio have collected over $43 million in ad valorem tax revenue from oil and gas producers – and that’s not counting additional income and job creation from new pipelines and power plants under construction.
Setting new records in oil and gas production is a good sign for our economy, government revenues, and can even herald improvements for our environment when used to offset the use of other fuels that produce higher levels of carbon dioxide. Thankfully, recent records are not likely to stand forever. The U.S. energy industry has a bright future ahead, and may soon be launching into uncharted territory for oil and gas production.