U.S. oil boom in 2018 seen having major economic impact

by WorldTribune Staff, January 16, 2018

Spurred by a surge in shale oil, the United States is poised to break an output record that was set in 1970.

U.S. oil production will soon top 10 million barrels per day and is expected to hit 11 million barrels per day by late 2019, a level that would rival the world’s top producer Russia, Reuters noted in a Jan. 16 report.

A Concho Resources drilling rig in New Mexico’s Permian Basin. / Concho Resources

“It has had incredibly positive impacts for the U.S. economy, for the workforce and even our reduced carbon footprint” as shale natural gas has displaced coal at power plants, John England, head of consultancy Deloitte’s U.S. energy and resources practice, told Reuters.

U.S. shale producers “won the price war” with OPEC “through aggressive cost-cutting and rapid advances in drilling technology. Oil now trades above $64 a barrel, enough for many U.S. producers to finance both expanded drilling and dividends for shareholders,” the Reuters report noted.

The U.S. currently exports up to 1.7 million barrels of crude oil per day. In 2018, the U.S. will also have the capacity to export 3.8 billion cubic feet per day of natural gas, the report said.

Mathias Schlecht, a technology vice president at Baker Hughes, General Electric Co’s oilfield services business, told Reuters that new wells can now be drilled in as little as a week, when a few years ago it could take up to a month.

U.S. hydraulic fracturing, or fracking, service revenues are expected to grow by 20 percent this year, approaching a record of $29 billion set in 2014, according to oilfield research firm Spears & Associates.

The shale industries growth has been significant for Midland, Texas, where unemployment has fallen to 2.6 percent, according to Willie Taylor, executive director of the Permian Basin Workforce Development Board.

Companies are now offering signing bonuses to attract workers to West Texas. One oil company flies workers to Midland from Houston weekly to fill a local labor void, Taylor told Reuters.

“It was an employer’s market,” he said. “Now it’s more of a job seeker’s market.”

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