Fracking responsible for 48% of US oil production and reduced fuel prices

The US energy renaissance has been driven by innovations in horizontal drilling and hydraulic fracturing, which were responsible for about 48% of US oil production and shaved up to US$ 0.94 per gallon from fuel prices in 2013, according to a new report.

Driving energy security

“For the first time in generations, surging domestic production is driving our energy security and creating large benefits for consumers,” said API Vice President for Regulatory and Economic Policy Kyle Isakower. “Over the last five years, nearly every barrel of new US production can be attributed to the use of horizontal drilling and hydraulic fracturing technologies, and that production is reshaping global markets in a way that is strengthening the US both economically and diplomatically.”

Fracking results in savings

The study, by ICF International, compared historical price and production data from 2008 to 2013 against a scenario without advanced horizontal drilling and hydraulic fracturing. Without the technologies, ICF estimated that international crude oil prices per barrel would have averaged US$ 122 to US$ 150 in 2013 – an increase of US$ 12 to US$ 40. The corresponding discount on gasoline and other refined products was US$ 0.29 to US$ 0.94 per gallon. In total, US consumers saved an estimated US$ 63 to US$ 248 billion in 2013. From 2008 to 2013, the cumulative savings for US consumers ranged from US$ 165 to US$ 624 billion.

“It’s important for policymakers to recognise that the US energy revolution was not a lucky accident, but the result of decades of American innovation aimed at unlocking our resources here at home,” said Isakower. “To build that momentum and strengthen our position as an energy superpower, it’s critical that policymakers turn aside duplicative regulations on hydraulic fracturing and ensure that US consumers can benefit from energy production on federal lands that remain off-limits.”

Fracking boom

The study also found that US oil production utilising horizontal drilling and hydraulic fracturing totaled 4.78 million bpd in 2013, accounting for 48% of all production – up from 11% in 2008. Although ICF limited its analyses to crude production and liquid fuels like gasoline, an earlier study by IHS estimated that the average US household saved about US$ 1200 in 2012 from unconventional production of both oil and natural gas, a cumulative savings of about US$ 163 billion.

Adapted from press release by Cecilia Rehn

Read the article online at: https://www.hydrocarbonengineering.com/refining/31102014/fracking-responsible-for-nearly-half-of-us-oil-production-and-reduced-fuel-prices-in-2013/