As new technological innovations plateau, the American shale boom is slowing down just when its importance in global markets has reached new highs following an attack on the heart of Saudi Arabia’s oil infrastructure.
U.S. oil production increased by less than 1% during the first six months of the year, according to the Energy Department, down from nearly 7% growth over the same period last year, The Wall Street Journal reports.
In addition to a decline in production, activity has slowed recently and employment has fallen in some of the hottest U.S. oil regions, according to a September report by the Dallas Federal Reserve.
The slowdown this year is driven partly by operational issues, including wells producing less than expected after being drilled too close to one another, and sweet spots running out sooner than anticipated. The challenges raise the prospect that the technological and engineering advances that have allowed shale companies to unlock record amounts of oil and gas from rock formations have begun to level off.
U.S. shale oil production now accounts for about 8 million barrels a day, or roughly 10% of oil worldwide, significantly boosting global supplies. It has helped protect the U.S. and the world from geopolitical supply shocks, but that buffer could shrink if production slows too much. Read the full story.
