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US Shale Boom Accelerating

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Walter Russell Mead, Via Meadia

The shale boom has exceeded all expectations. If you want to understand why more and more energy-intensive businesses are fleeing Europe for America, look no further than this new report.

The Energy Information Administration just released some excellent new data about America’s six biggest oil and gas regions. On Monday, it published the first edition of a new monthly Drilling Productivity Report. Contained within were some very encouraging signs for the shale revolution.

The new report covers six regions, but we’ll focus our attention on the two fastest-growing regions, which together have accounted for 75 percent of monthly oil production growth: the Eagle Ford and Bakken regions. In North Dakota’s Bakken formation, oil production is up more than sevenfold since 2007, and we’re extracting nearly six times as much gas over the same time period. Texas’s Eagle Ford is yielding 4.5 times the gas and more than 21 times the oil, as you can see below:

Maybe the most striking fact from this new report is the fact that, while rig counts are up sharply from six years ago, the amount of oil and gas produced from each rig has also risen substantially. In fact, the EIA admits that “[i]ncreases in drilling efficiency and new well productivity, rather than an increase in the number of active rigs, have been the main drivers of recent growth in domestic oil and natural gas production.” The oil and gas industry is getting demonstrably better at unconventional drilling:

The shale boom has exceeded all expectations to this point, and all signs point to continued success. If you want to understand why more and more energy-intensive businesses are fleeing Europe for America, look no further than this new report.

Via Meadia, 24 October 2013