Thanks to fracking technology and horizontal drilling techniques, the United States has gone from a large-scale energy importer to the world's top producer — a development with far-reaching consequences.
America produced an average of about 12.1 million barrels of crude oil, natural gas liquids, and biofuels a day in 2013 — that's 300,000 barrels a day more than Saudi Arabia and 1.6 million more than Russia, the two previous leaders.
U.S. production of crude oil alone rose by a record 991,000 barrels a day last year, according to the International Energy Agency. And oil imports declined by 16 percent, from $310 billion to $268 billion.
Fracking has enabled shale-gas production in North Dakota, Texas, and the formation that crosses parts of West Virginia, Ohio, Pennsylvania, and New York to account for 44 percent of total U.S. natural gas output.
"The hydrocarbon boom in the United States is driven by fracking," according to a report from the Hoover Institution headlined "Three Cheers for Fracking."
In the 1970s, some experts predicted that America would run out of natural gas, and between the early 1990s and 2008, U.S. oil production fell steadily. World oil prices rose and American imports increased, especially from unstable, often unfriendly nations.
"Fracking has upended all of this," declared Gary D. Libecap, a research fellow at the Hoover Institution and an economics professor at the University of California, Santa Barbara.
Fracking and horizontal drilling enable drillers to extract hydrocarbon deposits that would otherwise be inaccessible or too expensive to extract.
As a consequence, fracking has:
- Lowered overall energy prices
- Increased U.S. exports of natural gas
- Eliminated imports of liquid natural gas by the United States, saving $100 billion a year
- Benefited most world economies by tempering oil and gas price increases
- Lowered U.S. demand for oil from Venezuela, where rulers have been increasingly autocratic
- Shown the way for new oil and gas production in Europe, reducing dependence on supplies from Russia
- Expanded American manufacturing due to lower and more certain energy costs compared to other nations
- Contributed to a reduction in greenhouse gas emissions as the country shifts from coal-fired energy plants to natural gas-fired facilities
- Directly increased U.S. employment in oil and gas extraction by 28,000 jobs between 2007 and 2011 alone, and indirectly by 45,000 in new employment in support industries
Fracking and natural gas production, Libecap concludes, have been "good for the economy, good for democracies worldwide, and good for the environment."
It could be even better. According to the Institute for Policy Innovation, the federal government owns 28 percent of U.S. land, including 62 percent of Alaska and 47 percent of 11 Western states. Companies would be willing to drill there, but the Obama administration has delayed and denied drilling permits, and production on federal lands has fallen 23 percent since 2007.