Matt Ridley reports,
Although the current low oil price is bankrupting many producers and explorers in North Dakota and elsewhere, and many rigs are now standing idle with jobs being lost, there has only been a very modest fall in production.
That is because the technology for getting oil out is improving rapidly and the cost is falling fast, so some producers can break even at $30 or even $20 a barrel and it takes fewer rigs to generate more oil. It is one of the cruel features of innovation that it usually benefits the consumers more than the inventors.
This means the shale industry can now put a lid on oil prices in future. Aguilera and Radetzki argue that not only is the US shale industry still in its infancy, but that there is another revolution on the way: when the price is right, conventional oil fields can now be redrilled with the new techniques developed for shale, producing another surge of supply from fields once thought depleted. They also expect that other countries — beginning with Australia, Argentina, China and Mexico — are ripe to join the technology revolution begun in American shale.
The entire article.