One of the more interesting items buried in this week's 211-page Monthly Energy Review from the EIA (full report here) is the fact that U.S. crude oil production for the lower 48 states reached a 27-year high in May of 6.78 million barrels per day (see chart below, data here). That is the highest monthly crude oil production in the lower 48 states since 6.91 million daily barrels of oil were produced in May 1986. During the first five months of 2012, the EIA estimates that oil production in the non-Alaska states increased 16.5% compared to the same period last year, boosted by the strong, ongoing gains in North Dakota oil (+36% year to date through April) and Texas shale oil (+32% year to date through April).
Thanks to advances in technology (fracking and horizontal drilling), domestic oil production has been increasing since 2008, reversing a quarter-century downward trend in U.S. oil production that started in the mid-1980s (see chart above). In just the last five years, crude oil production in the lower 48 states has increased by an eye-popping 53.5%, mostly from increased production of unconventional, shale oil.
America's booming energy sector, especially the increased production related to shale oil and gas, has been America's "economic bright spot" for several years now, and it continues to get better and brighter all the time. As weak as overall economic growth is right now in the U.S. (only 1.8% in the first quarter), imagine what the state of the current U.S. economy would be like if we didn’t have the booming oil and gas industry that is bringing energy prosperity and shovel-ready jobs to states like North Dakota, Texas, and Pennsylvania. Thanks to the game-changing, $1 billion per day energy-related stimulus to America, the oil and gas sector is providing some much-need support to the U.S. economy, and continues to be one of the strongest reasons to be optimistic about the future of the economy.