Oil well production continues to increase due to advances in hydraulic fracturing, according to a report from Breitbart News Network. The publication noted the continuous improvement in production is analogous to the growth of computer processing. Just as Moore's Law projected the speed of processing chips would double every two years, technological innovations in hydraulic fracturing have led to roughly doubled productivity every two years, according to the publication.
"Oil wells have remained commercially viable despite declining U.S. oil prices."
Though the number of rigs operating in the country has declined from its peak of 1,600 a day in October 2014 to 675 in September 2015, productivity continues to improve, Breitbart reported. Additionally, oil wells have remained commercially viable despite declining U.S. oil prices.
Fortune magazine reported that improved technologies and increased productivity lowered the "break even" cost for fracking to remain profitable. While experts previously believed oil barrels needed to sell at $85 or $90 a barrel for the industry to remain viable, the recent decline to $65 a barrel and below resulted in no significant economic harm, the publication found. In fact, increased productivity allowed oil production in the United States to increase from an average of 5 million barrels a day in 2008 to more than 9 million in 2014, decreasing America's reliance on foreign oil and adding new jobs to the economy. It's also not unprecedented for oil prices to drop, Fortune added. Crude oil prices hovered below $25 a barrel from the mid-1980s to late 2003.
"The boom in fracking production has decreased America's dependence on foreign oil."
According to a report in National Journal, increased fracking production has also allowed for a bipartisan national budget agreement, as well as government sale of foreign oil that increased funding for infrastructure support and humanitarian efforts.
The Obama administration and the Republican-controlled U.S. Senate struck a deal to raise federal funds by selling Gulf Coast oil barrels from the U.S. Strategic Petroleum Reserve. The legislation, known as the Bipartisan Budget Act of 2015, would not have been possible without the increase in domestic oil production attributed to fracking, the National Journal reported. The budget deal calls for selling 58 million barrels of SPR oil over seven years, which could raise as much as $5 billion.
Previous legislation that tapped funds from SPR oil sales includes Senate-backed transportation programs and the House's 21st Century Cures Act. As reported by Bloomberg, the House legislation would fast-track lifesaving drug development and increase funding for medical research by streamlining clinical trials, offering economic incentives to drugmakers to develop new antibiotics and increasing support of the National Institutes of Health through a $9.3 billion research fund.
According to National Journal, the boom in fracking production has decreased America's dependence on foreign oil, with average imports falling to 6 million barrels per day, down from an estimated 10 million per day in 2005. The increase in domestic oil allows the government to sell reserves from the SPR while still meeting International Energy Agency requirements.