Increased Shale Oil Output Delivers Perfectly Timed Boost To Economy

by: Mark J. Perry

The chart below displays the daily crude oil output in America's top four oil-producing states: Texas, North Dakota, Alaska and California over the last ten years. Here are some highlights:Click to enlarge

1. After producing a relatively inconsequential share of the nation's crude oil for many years (fewer than 100,000 barrels per day and only 1.5% of total domestic output), North Dakota's oil production took off about five years ago when advanced drilling techniques including hydraulic fracturing started tapping into the vast resources of shale oil in the state's Bakken region. In just the last five years, the state's oil output has increased seven-fold, and North Dakota is now producing more than 700,000 barrels of oil per day, which is close to 11% of total US output.

2. In December of last year, North Dakota was producing so much shale oil in the Bakken region that it surpassed California's oil production to become America's No. 3 oil-producing state, and then just three months later in March of this year the Peace Garden State surpassed Alaska to become the nation's No. 2 oil-producing state.

3. After more than a decade of flat oil production in Texas of about one million barrels per day, oil output in the state started gushing following the discovery an ocean of unconventional oil in the Eagle Ford Shale area of South-Central Texas (and increased output in the Permian Basin). Since the beginning of 2010, oil output in the Lone Star State has increased by 75% through July of this year, and the state's oil production this month probably exceeded two million barrels of crude oil per day for the first time ever.

4. In the last five years, unconventional shale oil production in just the two states of Texas and North Dakota has added more than 1.4 million barrels per day of new domestic crude oil output, which has boosted total U.S. crude oil production to a 17-year high this month of more than 6.6 million barrels per day and reversed a nearly 30-year decline in domestic oil production.

Bottom Line: The increased output of unconventional shale oil over the last five years has delivered a powerful energy-based stimulus to the US economy - and the timing of that stimulus couldn't have been more perfect. Along with the increased production of shale oil and gas has come a gusher of new jobs at a critical time when we're trying to put Americans back to work. The states of North Dakota and Texas have been at the forefront of America's job-creating energy revolution as the state oil output data above show.