The U.S. Energy Information Administration (EIA) reports in its latest Short-Term Energy Outlook that American crude oil production hit 10.2 million barrels per day (b/d) last month, smashing the previous record of 10.04 million b/d set in 1970. This comes on the heels of the U.S. crossing the 10 million b/d mark in November 2017 for the first time in 47 years.
EIA also estimates production growth will continue, with U.S. crude output forecast to reach an annual average of 10.6 million b/d this year and 11.2 million b/d in 2019. Such record-breaking growth has been made possible thanks to hydraulic fracturing and advances in shale development.
It wasn’t long ago that the United States depended on foreign producers to the vast majority of the oil used to fuel the country. As recently as 2008, America was producing less than 5 million b/d of oil, while net imports of crude topped 11.1 million b/d. But with the introduction of fracking for shale development, coupled with technological advances in production such as horizontal drilling, American production has now more than doubled in the past decade, while net crude imports have dropped to 2.6 million b/d in November 2017 – an over 76 percent drop since November 2008.
In fact, the lifting of the U.S. oil export ban in 2015 along with staggering domestic production from shale has shaken OPEC’s grip on global oil markets. Case in point, the United Arab Emirates, a major OPEC oil and gas producer, imported roughly 700,000 barrels of light crude from the United States in December 2017. Moreover, American exports of crude and petroleum liquids are expected to increase, with the United State poised to be a net petroleum exporter by 2029, according to EIA, driven by shale development and further challenging OPEC’s share of the global market.
According to the latest EIA Annual Energy Outlook, shale oil production is becoming an increasingly larger share of U.S. production, currently accounted for about 65 percent of the total. The most recent drilling productivity numbers show that oil production from shale grew to over 6.4 million barrels b/d in January 2018, up more than 1.7 million barrels from January 2017. Much of this growth is stemming from the Permian Basin, which in the last year has seen oil production soar 31 percent to nearly 2.8 million b/d.
Such incredible growth from shale has allowed the United States to achieve energy production and export milestones that would have been unthinkable just 10 years ago – and they’ve been achieved even sooner than expected. Only last month, EIA forecast U.S. oil production to average 10.3 million b/d in 2018 and 10.8 million b/d in 2019, estimates they have revised by an additional 300,000 b/d in less than a month. Additionally, the agency’s Annual Energy Outlook 2018 now estimates the United States to be a net energy exporter by 2022 – that’s four years earlier than projected last year.
There is something uniquely American about realizing this latest production record: once at the mercy of foreign powers, American innovation and ingenuity – along with abundant natural resources – has allowed us to achieve not only energy security but dominance, and the future looks increasingly bright.