So long, Mother Russia. There’s a new top producer of oil and gas outside of the OPEC (Organization of the Petroleum Exporting Countries), and they’re projected to hold that spot for at least the next quarter century.
The United States struck black gold over the past decade with the recent shale oil boom, and production of oil and natural gas is steadily growing at a rate that will make it the world’s largest non-OPEC oil producer until 2040 – this according to the U.S. Energy Information Agency (EIA). Even with growth at a low 1% per year, and a predicted peak in 2020, the U.S. will still be outpacing Russia by several million barrels daily well after that.
More Supply, Less Demand
This rise to energy dominance can be attributed to directional drilling, fracking, well recompletion, or one of the many other new technologies the U.S. has rolled out over the years. However, even with this esteemed progress, it’s not going to make much of a dent in OPEC’s grasp on the world’s oil supply – which will continue to remain around 40% for years to come.
For now though, Americans are currently reaping the benefits of not only record domestic production, but global as well. The cost of gasoline is dropping as oil prices are hitting their lowest point since 2010 – from over $100 a barrel down to $80. The supply is there; the demand is not. At least not right now.
Impact on the Economy
Analysts will debate on whether or not the declining price of oil is actually a bad sign, claiming lower prices signal a slowing economy – but those signs are few and far between. It really does come down to the United States’ staggering harvest. Crude oil output has jumped 80% in six years, resulting in almost 4 million barrels per day.
Let’s not forget the job market either. The tight oil and shale gas sector alone is responsible for close to 2 million jobs, and will most likely double that over the next decade. If anything, the domestic fossil fuel surge is one of the country’s leading economic strengths.
Dome Energy can attest to the steady growth of production, as we have closed on two acquisitions within the second half of this year. The inclusions of VistaTex and Gas Ventures have bolstered our portfolio and will contribute to funding even more investments in the future.