The U.S. oil industry is set to break a 1970 record for oil output. According to Reuters, shale production has pushed American oil output to 10 million barrels of oil a day, a total that’s expected to rise to 11 million by 2019.
The surprising output of oil has had a significant impact on the U.S. economy. The surge in oil output has found jobs for many Americans and has also reduced gas prices by up to 37%. What’s more, shale has also replaced coal in power plants, thereby reducing greenhouse gas emissions.
“It has had incredibly positive impacts for the U.S. economy, for the workforce and even our reduced carbon footprint,” said John England, the head consultant of the Deloitte Center for Energy Solutions.
According to the CME Group, the daily trading volumes of American oil have increased significantly over the past 10 years, placing American energy exports on par with the Middle East. However, the question is whether or not shale will be able to continue at this rate of output what with rising labor and drillable land costs.
American shale producers don’t seem to be worried what with oil output already having far outpaced previous expectations. Because oil is now able to trade over $64 a barrel, American shale producers are capable of financing drilling equipment and services.
To add interest in the shale revolution, the surprising output of oil turned the industry’s hierarchy on its head. Small oil firms and entrepreneurs became big-name billionaires while the nation’s top oil firms are now reaching out to buy their share of shale investments.
With oil firms like Exxon and Chevron spending billions of dollars on drillable land for shale, the cost of labor and land is also going up — a positive thing for American wages. The surge in oil could mean good things for the metalworking fluids market as well, which is currently estimated to reach $9.74 billion in value by 2020.
“It was an employer’s market,” said Willie Taylor, the executive director of the Permian Basin Workforce Development Board. “Now it’s more of a job seeker’s market.”