In the face of low oil prices, a world-wide glut, and a war in the market, this is the best news the U.S. could be getting.
In the past four years, we’ve seen major growth in drilling technology. Our biggest shale plays, the Bakken, Permian, Marcellus, and Eagle Ford areas, have seen 23%, 87% and 111% jumps in IP rates. And these high-producing wells are costing less and coming up faster than ever. The time it takes to drill one well has gone from as high as 44 days to only 8 days. That’s just a little over one week to get a new well online!
Plays like the Marcellus in the northeast have been able to increase production so that the area accounts for 35% of the country’s total production. The country’s rate has risen 28% in the last five years, slowed only slightly by this past year’s drop in commodity prices.
The only down-side to this list of improvements: our own demand is being outpaced by the supply. Our next step is to allow exports, so we can grow with global demand.
We already allow exports to Canada, our partner in shale product. Next on the list is Mexico, whose shale boom is just about to begin.
We will need to depend on such exports to keep up this growth in efficiency and supply in the future.
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