Drilling in prolific shale plays has enabled America to overtake Russia as the world’s leading producer of natural gas and grow its oil output for the first time in decades. These feats are even more impressive when one considers that they occurred despite a government-instituted moratorium on deep water drilling after the BP oil spill in the Gulf of Mexico.

The International Energy Agency has also recently predicted that the US could surpass Russia as the world’s second biggest producer of liquid hydrocarbons, behind Saudi Arabia.

The shale oil and gas revolution has also provided a much-needed stimulus to the US economy. America’s growing abundance of domestically produced natural gas means that households and commercial customers enjoy some of the lowest gas and electricity costs in the world.

Surging domestic production of natural gas liquids has breathed new life into the US petrochemical industry by lowering its feedstock costs to the point that American chemical plants enjoy superior cash margins to competitors in Europe and China. The American Chemical Council has catalogued US$72 billion in planned chemical and plastics projects to take advantage of America’s cheap and bountiful domestic energy. US imports of light-sweet crude oil continue to shrink and will soon hit zero on the Gulf Coast, reducing America’s reliance on expensive foreign oil. US exports of propane, gasoline and diesel have surged to record highs and the nation is building the infrastructure to liquefy and export low-cost natural gas to high-priced markets in Asia. The US bureau of labour statistics reports that employment in oil and natural-gas extraction increased by 22% over the past three years.

Research outfit IHS estimates that the number of jobs directly or indirectly supported by the domestic energy boom in the US will increase to 3.3 million by 2020. Roger Conrad and Elliott Gue, editors of Energy & Income Advisor, expect gains in drilling efficiency and declining production costs to fuel additional growth in America’s hydrocarbon output.

“Major plays such as the Bakken Shale in North Dakota, the Eagle Ford Shale in south Texas and the Marcellus Shale in Appalachia are shifting from the developmental stage to a manufacturing stage. This evolution has lowered costs above ground and on the surface. Innovations such as pad drilling, which enables producers to drill multiple wells at a single site, have reduced the time and money needed to extract oil and gas from these plays. We also expect innovations on the completion side to improve initial production and ultimate recovery rates.”