Oil prices are set to rise again due to growing foreign demand, which could set the stage for another American oil boom built on the infrastructure of the first fracking boom, according to an economist who works on energy issues.
“Even with China’s economy slowing, global oil use will still rise by 1.3 million barrels a day this year—equal to the peak daily output of the entire Bakken Shale field,” Mark Mills, a senior fellow at the Manhattan Institute, wrote in a Wall Street Journal oped Monday. “Middle-class automobile ownership in Asia is rising steadily, from today’s average of 60 to 80 cars per 1,000 residents toward the West’s 600 to 800 cars. All the fundamentals point to growing demand for oil.”
“Shale 2.0, when it comes, will be even better,” Mills wrote. “The technology is advancing at a speed usually associated with Silicon Valley. Over the past half-decade, average output per rig has risen at least 400%. Productivity rose 40% last year, despite cost constraints. The rigs are getting cheaper, and the efficiencies brought by the latest tools—from data analytics to robotics to advanced materials—have yet to be deployed.”