America oil supply is secure for centuries due to hydraulic fracturing, or fracking, which has global oil industry what Uber did to the taxi industry, wrote a major investor in a Thursday Wall Street Journal opinion piece.
“Fracking is to the global oil industry what Uber is to taxi medallion owners: great for consumers who enjoy the sudden abundance, deadly for incumbents whose business models were built on exploiting scarcity,” Donald L. Luskin, chief investment officer at Trend Macrolytics LLC, wrote.
Fracking has caused American oil and natural gas reserves to surge to their highest levels since 1972. These huge increases are directly attributable to exploitation of tight oil formations and shale natural gas via fracking.
“Thanks to the U.S.-led revolution in fracking, oil is abundant. It will be for decades, if not centuries, because there is shale everywhere in the world. And unlike the megaprojects that have dominated the oil industry over the past several decades, shale can be tapped by smaller companies with less capital. The oil market, as OPEC has learned to its sorrow, is now much more difficult to control,” Luskin continued. The business of fracking for both oil and natural gas is dominated by relatively small energy companies.
American reserves of crude oil and natural gas have risen for six consecutive years, despite the U.S. producing more oil and natural gas than any other country. Oil production last year was 80 percent higher than it was in 2008. The United States produced an average of about 9.3 million barrels of crude oil per day in June.
The increase in reserve levels is illustrated in this Energy Information Administration graph:
America even controls the world’s largest untapped oil reserve, the Green River Formation in Colorado. This formation alone contains up to 3 trillion barrels of untapped oil shale, half of which may be recoverable. That’s five and a half times the proven reserves of Saudi Arabia. This single geologic formation could contain more oil than the rest of the world’s proven reserves combined.
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