Question

If you look at the US production of crude oil, you can see that the data trend for peak oil occurring around 1970. Since then it has declined with a plateau here and there. However around 2010, US oil production has increased quite a bit. What do you think is the cause for increase in oil production at the time?

Answer 1

The 1970s energy crisis when the Western world, particularly the United States, Canada, Western Europe, Australia, and New Zealand, faced substantial petroleum shortages, real and perceived, as well as elevated prices. The two worst crises of this period were the 1973 oil crisis and the 1979 energy crisis, when the Yom Kippur war and the triggered Iranian revolution interruptions in Middle Eastern oil exports.

The crisis began to unfold as petroleum production in the United States and some other parts of the world peaked in the late 1960s and early 1970s. World oil production per capita began a long-term decline after 1979.

The major industrial centers of the world were forced to contend with escalating issues related to petroleum supply. Western countries relied on the resources of countries in the Middle East and other parts of the world.

Operators drilling at the Bakken and other shale formations are combining horizontal wells and hydraulic fracturing - the same technologies used to significantly increase shale gas production - to boost oil production. Horizontal drilling has become especially important as oil prices have risen considerably. According to Baker Hughes rig count data, horizontal rigs comprised less than one-third of oil-directed rigs in September 2008, the previous overall rig count peak.

While much of the increase in 2009 was associated with deepwater developments in Federal gulf of Mexico , the increase in 2010 was led by escalating horizontal drilling programs in US shale plays, notably the North Dakota section of the Bakken formation.