The shale boom is back.
The Energy Information Administration on Monday said it expects an increase in domestic shale-oil production to nearly 5 million barrels a day for April, which would be the highest monthly level in roughly a year.
The EIA offered forecasts for a climb from seven major U.S. shale producers by 109,000 barrels a day to 4.962 million barrels a day in April from March, according to the agencies monthly Drilling Productivity Report.
During the two-year span of falling oil prices, companies retooled. By employing new technology and rethinking the fracking process, they became more efficient and lowered their “brake-even price,” the lowest oil can be for a producer to recoup its costs.
When oil prices rebounded, companies took advantage and ramped up production.
Big Oil Finds in Texas and Alaska
In addition, as technology and techniques to find and get shale oil continue to advance, more areas become commercially available for production.
For instance, late last year, a massive oil and natural gas field was found in Texas:
Geologists say a new survey shows an oilfield in west Texas dwarfs others found so far in the United States, according to the US Geological Survey.
The Midland Basin of the Wolfcamp Shale area in the Permian Basin is now estimated to have 20 billion barrels of oil and 1.6 billion barrels of natural gas, according to a new assessment by the USGS.
That makes it three times larger than the assessment of the oil in the mammoth Bakken formation in North Dakota.
The estimate would make the oilfield, which encompasses the cities of Lubbock and Midland — 118 miles apart — the largest “continuous oil” discovery in the United States, according to the USGS.
And Alaska could be the next fracking frontier:
A pioneer of the U.S. shale revolution wants to take fracking to America’s final frontier. Success could help revive Alaska’s flagging oil fortunes.
Paul Basinski, the geologist who helped discover the Eagle Ford basin in Texas, is part of a fledgling effort on Alaska’s North Slope to emulate the shale boom that reinvigorated production in the rest of the U.S. His venture, Project Icewine, has gained rights to 700,000 acres inside the Arctic Circle and says they could hold 3.6 billion barrels of oil, rivaling the legendary Eagle Ford.
[ … ]
The companies’ first well, Icewine 1, confirmed the presence of petroleum in the shale and found a geology that should be conducive to fracking, Basinski said. Their second well, due to be drilled in the first half of 2017, will fracture a small section of that range and see how readily the oil flows.
“We don’t know what we have yet,” said Michael McFarlane, Burgundy’s president. “We know that the shale has sourced a tremendous amount of oil, but is it commercial? That’s a question that we haven’t answered yet.”
If companies can figure out how to safely get and transport shale oil at a cost that makes business sense, we’ll see it come to market.
Great for U.S. Companies and Workers
Rising domestic energy production is great news for U.S. companies and workers.
Even with the fall in oil prices in the last few years, since President Barack Obama lifted the oil export ban in 2015, exports have surged. As production increases, there will be more opportunity for American workers to satisfy overseas energy appetites.
Abundant shale energy is also good for manufacturing. ExxonMobil recently announced $20 billion in manufacturing investments that will create 45,000 jobs.
After some dark times, it’s looking brighter for American shale energy.
UPDATE: Check out this fascinating 360-degree video from a drilling rig in Texas’ Permian Basin.
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EDITORS NOTE: An oil rig worker in the Permian basin outside of Midland, Texas. Photo credit: Brittany Sowacke/Bloomberg