Advancements in hydraulic fracturing and horizontal drilling have already unlocked vast new natural gas resources from shale rock. Drillers are using the same innovations that brought about the “Shale Gas Revolution” for oil, leading to a surge in shale oil (or “tight oil”) production.
From January 2009 until April 2013 U.S. oil production jumped by 30%, rising from 5.1 million barrels per day (md/d) to 7.3 mb/d, the highest level in over 20 years.
This has had several short-term geopolitical effects. It has provided some breathing room to allow tougher sanctions on Iran. It has reduced the revenues and influence of OPEC. It has also added some spare capacity to global oil markets, reducing volatitliy.
However, despite some of these short-term geopolitical benefits, the U.S. tight oil boom does very little for long-term energy security. The longevity of the tight oil boom is unknown. Greater oil production does not insulate American consumers from gas price spikes. And a surge in oil production threatens to head off action on climate change, delaying the transition to cleaner energy.
ASP’s Perspective Paper, “The U.S. Tight Oil Boom: Geopolitical Winner or Long-Term Distraction?” highlights these contradictions – the U.S. tight oil boom has short-term geopolitical benefits, but over the long-term it does not provide real energy security.