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Oil Glut Part 2: We Are At The End Of The Beginning Of The Young U.S. Shale Oil Boom

This article is more than 8 years old.

The shale industry is unlike any other conventional hydrocarbon or alternative energy sector in that it shares a growth trajectory far more similar to that of Silicon Valley’s tech firms. In less than a decade, U.S. shale oil revenues have soared from nearly zero to more than $70 billion annually (even after accounting for the recent price plunge). Such growth is 600 percent greater than that experienced by America’s heavily subsidized solar industry over the same period.


U.S. Oil Production Since World War Two

John Shaw, chair of Harvard’s Earth and Planetary Sciences Department, recently observed: “It’s fair to say we’re not at the end of this [shale] era, we’re at the very beginning.” He is precisely correct.

In recent years, the technology deployed in America’s shale fields has advanced more rapidly than in any other segment of the energy industry. Shale 2.0 promises to ultimately yield break-even costs of $5–$20/barrel—in the same range as Saudi Arabia’s vaunted low-cost fields.

The technology and market forces are now aligned for a second and shale-dominated boom in U.S. oil production.

For more about shale's new technology realities see my recently released Manhattan Institute paper, Shale 2.0 – Technology & the Coming Big-Data Revolution in America’s Shale Oil Fields.

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