US oil and gas production index

Oil and gas production has undergone a significant change in the past five years. The emergence of new horizontal drilling and hydraulic fracturing technologies has enabled oil and gas producers to tap into previously uneconomical resources located in nonporous shale rock formations. The most notable formations include the Barnett (Texas), Eagle Ford (Texas), Marcellus (Appalachian Basin), Utica (Appalachian Basin) and the Bakken (North Dakota, Montana). The United States is currently the only country worldwide with significant hydraulic fracturing production, and this is largely due to an already well-established infrastructure for extraction and distribution of natural gas resources. Furthermore, hydraulic fracturing has been implemented in the United States for several decades, and recent upticks in production can be largely attributable to improved processes and fracking fluids.

In the five years to 2025, US oil and gas production is expected to increase at an annualized rate of 1.6%. Growth has been robust over the past five years, as oil and gas companies have scrambled to position themselves around shale deposits. However, the United States still lacks infrastructure to fully capitalize on current production capacity. For example, nearly one third of natural gas production in the Bakken formation is flared, which is far lower than in regions in Texas where almost no natural gas is flared. When natural gas is flared at extraction sites, this gas is essentially wasted and cannot be regained. The lack of appropriate infrastructure to capture and transfer the vast amounts of shale gas located in regions like the Bakken has intensified the industry's demand for new pipelines.

Advancements in extraction technology spurred natural gas more than crude oil production. This is due to the relatively higher amount of natural gas resources located in the United States. For example, production of crude oil in 2013 and 2014 grew 1.6% and 6.3%, respectively, and production of natural gas grew by 14.8% and 17.0%, respectively, in the same years. Environmental concerns have also increased as fracking has become more widespread. However, environmental aspects of hydraulic fracturing and horizontal drilling are anticipated to remain in the spotlight. Natural gas has also been gaining popularity as a substitute for coal and crude oil, thus further encouraging oil and gas companies to extract the commodity. Despite falling prices beginning in 2014 and persisting through 2016, the EIA expects production levels to remain high. Production grew significantly in 2018 as both natural gas and crude oil grew significantly amid high consumption and favorable supply conditions. As consumption grows and the US continues to position itself closer to becoming a net exporter of oil and gas, production has continued to grow strongly through 2025.