Oil Production at Highest Level Since 1998

On Tuesday, the Energy Information Administration (EIA) announced that crude oil production in the U.S. reached a 15-year high with nearly 6.5 million barrels per day in September. The boom was attributed to the use of hydraulic fracturing and horizontal drilling techniques which yielded a 16 percent increase, or an extra 900,000 barrels per day, from September 2011 levels.

The report noted that two states in particular were leading the ramp up - Texas and North Dakota. In less than five years, oil production in North Dakota has more than tripled due to a rapid increase in production activity in the Bakken Shale formation and Williston Basin. In 2007 the state was producing roughly 150,000 barrels per day, where now it averages nearly 730,000 barrels per day to become the second largest oil state in the country when it passed Alaska last May. Crude oil production in Texas has nearly doubled since 2010 based on figures in the EIA report. The Eagle Ford Shale play has provided a significant boost to that number, where before it was yielding roughly 120,000 barrels per day in July 2011, it now pumps out about 310,000 barrels per day. 

This week's EIA report comes on the heels of a much publicized November 2012 estimate from the International Energy Agency's (IEA) annual World Energy Outlook which predicted that the U.S. could become a net exporter of natural gas by 2020 and essentially energy independent by 2035 due to large increases of fossil fuel production spurred by fracking and horizontal drilling.