The United States is expected to be the world’s largest producer of oil and natural gas next year, eclipsing production in the Russian Federation and Saudi Arabia.
Since 2008, U.S. oil and gas production has exploded thanks to the advent of hydraulic fracturing, or fracking — a drilling practice that has allowed companies to reach vast fuel reserves buried deep in large shale formations across the country.
The Energy Information Administration notes that “U.S. petroleum production has increased 7 quadrillion [British thermal units], with dramatic growth in Texas and North Dakota. Natural gas production has increased by 3 quadrillion [British thermal units] over the same period, with much of this growth coming from the eastern United States.”
While both Russia and Saudi Arabia have increased their hydrocarbon output, it’s been marginal compared to what the U.S. alone has done — only about one quadrillion British thermal units in the last five years.
Skyrocketing oil production has already caused Saudi Arabian officials to lose some sleep, according to analysts. OPEC countries could see revenues go down as U.S. oil production and exports begin to gain market share.
“Because the United States and Canada has kind of filled up that stack, it has reduced the amount that OPEC needs to bring on,” said Jamie Webster of PFC Energy. “So that is why the boom in the United States is in fact already affecting OPEC.”
Russia must be seeing red as well, as oil and gas production make up about 40 percent of their budget and are integral to their European relations. The Russian Academy of Sciences’ Energy Research Institute projects that Russian oil exports could fall up to 30 percent after 2015 and reduce their economy by $100 billion.
“Russia looks like the main loser in the global market,” the institute’s Tatiana Mitrova told The Wall Street Journal.
However, the head of Gazprom, one of Russia’s largest energy companies, called the U.S. energy boom “a bubble that will soon burst.”
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