August 23, 2019
Horizontal drilling and hydraulic fracturing — fracking — began, in earnest, in the mid-2000s, for natural gas production in North Central Texas’ Barnett Shale. A little more than a decade later, fracking and new drilling techniques are used by the Permian Basin of West Texas and New Mexico, with interesting economic results.
According to a recent paper by the Federal Reserve Bank of Dallas, the shale boom benefitted the nation’s oil trade balance and oil-producing regions, leading to large employment and output gains. Between 2010-2015, gains added approximately 1% to the U.S. gross domestic product, noted the paper’s authors, Dallas Fed’s Mine Yucel and Michael Plante.
There have been some challenges with the shale boom, one of which was inadequate pipeline capacity in the Permian Basin. The other, the ban on export of U.S. crude oil, was a constraint on prices until it was lifted at the end of 2015, the paper’s authors said.
Pictured: Shale Drilling Rig, Texas Eagle Ford Basin
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