From two per cent 15 years ago, fracked oil now accounts for 50 per cent of America’s daily oil production. A trickle of 102,000 barrels per day in 2000 has become a flood of 4.3 million barrels per day in 2015. So much growth has allowed the country’s oil production to increase faster than any time in its history. ‘It has undoubtedly re-shaped the US,’ says Neil Hirst, Senior Policy Fellow for Energy and Mitigation at the Grantham Institute, Imperial College London, ‘and to some extent also the global energy landscape.’
The new oil is produced from shale, a fine grained rock, and other ‘tight’ rock formations mostly from the states of Texas, Montana and North Dakota. The process involves deep drilling vertically to shale layers, before ‘fracturing’ horizontally with a high pressure water mixture in order to release the crude oil within. On a national scale, it has displaced coal for power generation and reduced some of the US’ greenhouse gas emissions. However, potential dangers such as contaminating the water supply and destabilising the geology has made the fad a controversial one. For now, fracking production outstrips thorough knowledge of its impacts.
On an international scale, fracking has ‘brought North America close to energy self-sufficiency,’ says Hirst ,‘which has been a strategic objective of US policy for decades.’ America is now third in the world for oil production, behind Saudi Arabia and Russia. With shale oil, the US has been able to separate itself from the Organisation of Petroleum Countries (OPEC), which includes oil-exporting countries such as Saudi Arabia, Nigeria and Algeria. It is also responsible for the lower oil prices currently being experienced around the world. ‘Of course this may not last,’ says Hirst. ‘Because shale oil is relatively high cost we must expect a pause, and probably a decline in US shale oil production while oil prices remain low.’
In the medium term, however, he predicts that fracking will continue to play a large part of US oil production: ‘When oil prices have returned to a level closer to the marginal production cost, shale oil production will probably resume its growth as a large share of total US oil production.’