by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The world has changed. Although few yet understand it, the revolution in the production of oil and natural gas from shale has altered the course of global energy, affecting most of the world’s people. This is not a short-term event. Citizens, industries, and nations will be impacted for decades to come.
We are witnessing a modern energy miracle. For more than 30 years, U.S. crude oil production fell from 9.6 million barrels per day in 1970 to 5 million barrels per day in 2008. Oil production, an annual 200-billion dollar industry, was in long-term decline. Industry experts proclaimed that we had reached “peak oil” and that world oil output would soon fall. But beginning in 2008, US production soared, again reaching 9.6 million barrels in June of this year, recovering all of a 30-year decline in just seven short years.
For more than a century, geologists searched for pockets of oil and gas between rock layers. But by using the technological advancements of hydraulic fracturing, or fracking, and horizontal drilling, geologists learned how to squeeze oil and gas out of the rock itself. Shale is a common rock formation that covers large areas in the US and other nations. In a 2013 study, the Energy Information Administration concluded, “the world shale oil and shale gas resource is vast.” The shale revolution has opened additional centuries of low-cost hydrocarbon resources to modern society.