Reasons for US energy production expansion

Todd Royal:
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There are three reasons why U.S. oil production is skyrocketing.  Number one is that demand is rising.  OPEC has recently forecast that global oil demand should "surpass 100 million barrels per day next year."  The group sees demand increasing by "1.45 million bpd next year"; however, trade tensions between the U.S., China, Canada, the E.U., and other longstanding trade agreements in question could temper growth.  OPEC qualified its report about demand rising over trade worries by saying, "If trade tensions rise further and given other uncertainties, it could weigh on business and consumer sentiment."  With the U.S. and the E.U. working toward resolving a looming trade dispute over increased tariffs in late July, this is a positive first step toward global oil demand staying strong.

Second, U.S. federal tax policies are favorable toward exploration and production (E&P), which will assist with production increases.  President Trump's America First Energy Plan states:
That we [the U.S.] have vast untapped domestic energy reserves.  We must take advantage of the estimated $50 trillion in untapped shale, oil and natural gas reserves, especially those on federal lands.
According to Karen Alderman Harbert, president of the U.S. Chamber of Commerce's Global Energy Institute, record-breaking oil production will lead to "an explosion in exports."  Growth in exports will allow additional supply to be sold that otherwise wouldn't come to market.  Expanding energy development – particularly, expanding fossil fuel exports – will be a top priority for the Trump administration, as it will also use energy as a geopolitical tool.  Texas is the example for the U.S. moving forward of government and private business working toward expanding oil and natural gas production.  U.S. government policies will continue moving in this direction.

The third and biggest reason is use of technology, where the U.S. is making its greatest gains toward increased production.  Since the 2014 crash, shale companies have slashed costs but also employed automation and cutting-edge technologies like robotics, sensors, and smartphones to keep drilling.  The oil and gas industry is undergoing a modernization push.

This was on display in June at the Unify Conference, "an industry forum on digital technology put on by Baker Hughes," in Houston, Texas.  At this conference, technology companies like Google and Microsoft pitched energy executives to purchase cloud and artificial intelligence deals.  Darryl Willis of Google, who presented at Unify, said, "Energy companies have reams of data but only use 5% of it, a serious problem in the digital economy."
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There is more.

OPEC's attempt to destroy the shale market through predatory pricing backfired on the cartel.  The shale producers got more efficient and now have driven the cost of production to below the level for several OPEC states.  The tech companies can help them continue this trend and find more oil.  Besides the huge growth coming out of the Permian Basin of West Texas the fracking technology is also being used to open old oil field production in areas thought to have been played out.

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