Another recent study, this one by the American Petroleum Institute (API), a national association that represents the oil and gas industry, has shown how drilling and spending on shale oil and gas boomed in 2011. This report stated that 10,731 shale oil and natural gas wells were drilled and $65.5 billion was expended in that year alone. Just a few years ago, in 2009, there were only 5,531 such wells and 7,077 shale wells. Almost twice as many shale gas wells were drilled in 2011 as the year before, with 6,759 drilled in 2011 compared to 3,414 in 2010.
This is great news for the American oil and industry, especially for those states like Texas rich in shale oil and gas. The number of wells drilled was up 43.8 percent from 2010, and drilling expenditures were up 87.6 percent in the same time frame. Shale gas drilling expenditures accounted for more than half of all drilling expenses in 2011, up from only one-fourth in 2009. Shale wells now account for almost a quarter of all wells drilled in the US–API’s Statistics Director Hazem Arafa estimates it at 23%.
Meanwhile, offshore drilling declined in the past years, in large part due to the moratorium after the Deepwater Horizon incident, but picked up again in 2011, with expenditures rising to $8.1 billion. That is still very little compared to the 2009 expenditures of $24.9 billion, but is more than double the 2010 figure of only $4 billion. Overall, all types of wells drilled totaled 44,160 with an expenditure of $124,794,493,000 in 2011, showing the health of the entire industry which supports 9.2 million US jobs and produces $85 million a day in government revenue. This industry represents 7.7% of the US’s total economy and has invested over $2 trillion in the US since 2000, investing in all kinds of energy solutions.
The investment in shale keeps coming. Chinese companies, through joint ventures, invested $5.5 billion in shale oil and natural gas in the US since 2008. China’s investment is just a fraction of the total $133.7 billion in investment between 2008 and 2012, with 20% of that coming from joint ventures with foreign companies. According to API, in 2012 the US received $41 billion in capital investment for tight oil, and API estimates by 2020 that yearly investment could be $72 billion.
The important lesson from this latest API report on the booming US shale oil and natural gas industry is, as Arafa said, “The rising numbers illustrate the growing importance of shale drilling in US oil and natural gas development”. He noted that shale drilling drove the increases in drilling overall in the US during 2011.
As someone involved in the oil and gas industry, I believe that this latest report is just more evidence of the health of the oil and gas industry in America, and shows how crucial shale oil and natural gas has become to both our energy needs and our economic growth.
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