U.S. Shale
The price-elastic supply that broke OPEC's pricing power and changed the global cycle
In 2008, the United States produced approximately 5.0 million barrels per day of crude oil and condensate per the EIA's Monthly Energy Review (Table 3.1).
The country had been a net oil importer for more than three decades; domestic production had been declining since its 1970 peak; and the strategic posture of U.S. energy policy had been organized around managing import dependence on Saudi Arabia, Mexico, Canada, and Venezuela.
Eleven years later, in November 2019, U.S. crude oil production reached approximately 12.
9 mbpd, a level it had not held since the early 1970s and one that briefly made the U.S. the world's largest crude producer ahead of Saudi Arabia and Russia per EIA monthly data.
The 7.9 mbpd of incremental production over those eleven years did not come from new offshore discoveries, expanded conventional onshore drilling, or technological breakthroughs in deepwater.
That is the opening. Finishing a lesson is where it stops being interesting and starts being useful: the full lesson runs to 7 sections and ends with 6 practice questions. A free account is what opens the rest, and the other 255 lessons in the Academy with it. No card.
What this lesson covers
- 1Why the shale supply curve is different — short cycle, price-elastic
- 2What shale's emergence did to the global oil market
- 3Shale break-even and the supply-response curve
- 4U.S. shale crude production by basin — recent context
- 5George Mitchell, Mitchell Energy, and the Barnett Shale — the experimental work that unlocked shale
- 6Where to see this on the platform
- 7Summary