As Marybethand I posted, domestic oil production is becoming an important economic issue. In her post, Marybeth finds that the U.S production has been rising despite the huge decrease in global oil price. Domestic producers may be still cranking out oil so far, yet there are signs of slowdown everywhere. Bloomberg created an animation that shows the record drop in drilling activities. The declining oil price has caused domestic producers to shut down rigs at an unprecedented rate. Bloomberg estimates that about active rigs declined by more than 40 percent.
As you can see from the screen shot above, you can interact with the animation by clicking different state, rig type, and time period. I highly recommend everyone to check it out via link below.
So why is it that the production itself is actually increasing when drilling activities are falling? According to Bloomberg, the opposite trend in production and drilling is due to efficiency of new wells. These new wells pump oil faster and in larger quantity. Therefore, “despite the tumbling number of active rigs, the U.S. is pumping more oil than any time since 1972”. The graphs below depicts this relationship.