Research shows that drilling productivity increased six-fold from the mid-2000s to early 2017. Gains in below-ground efficiency—the number of barrels produced per foot of drilled wells—have largely driven this increase in overall productivity. The large oil price declines during the Great Recession and from 2014 to 2016 also played a role. However, further large increases in productivity are unlikely absent additional improvements in technology or a subsequent large downturn in oil prices.
Corporate debt levels have grown substantially during the 10year recovery from the global financial crisis. Even excluding the financial sector of the U.S. economy, the value of corporate bonds outstanding grew from approximately $3 trillion in 2008 to nearly $6 trillion in 2018. Crucial in weighing these concerns is identifying whether capital reallocation is a substitute for or complement to new investment.
This study shows how subsurface ownership shapes the income eﬀects of oil and gas extraction. For the average U.S. county with growth in extraction from 2000 to 2014, we ﬁnd that royalty income and its multiplier eﬀect accounted for 70 percent of the total income gain, with each royalty dollar generating an additional 49 cents of local income. A county where residents own the subsurface captured 28 cents more of each dollar in production than one with absentee ownership. Nationally, oil and gas production increased U.S. personal income in 2014 by $67 billion (0.5 percent) more than if all royalties accrued abroad. Areas with the same resource abundance can therefore experience contrasting economic outcomes because of diﬀerences in ownership.
Over the past 10 years, U.S. investment has become more variable. David Rodziewicz finds that the increase in variability was driven by a combination of increased energy investment and an increased concentration of investment in more volatile segments of the sector.
The second quarter issue of the Oklahoma Economist looks at the data and factors behind the recent rise in U.S. oil and gas productivity and compares it to other industries that have experienced similiar surges in productivity.
Over the past decade, U.S. energy production has boomed, reducing the demand for energy imports and boosting energy exports. The resulting large decline in net energy imports has helped reduce the U.S. trade deficit significantly. Resurging energy production and booming energy exports in recent months will likely help reduce the U.S. trade deficit by another 5 percent by the end of 2018.
The 2014 oil price decline sparked concerns about energy firms' future earnings and creditworthiness. Rajdeep Sengupta, W. Blake Marsh, and David Rodziewicz find that oil firms involved in exploration and drilling were charged higher loan prices relative to other oil firms in the wake of the decline.
The Energy Databook provides current economic indicators to help monitor trends and allow comparison of past information. These indicators include: oil and natural gas prices; global petroleum production and demand; U.S. oil production and petroleum demand; U.S. crude oil stocks; OECD petroleum stocks; U.S. oil imports; U.S. oil exports; oil and gas drilling rig counts; and U.S. natural gas production.
View past issues of the Energy Databook.
The Federal Reserve Banks of Kansas City and Dallas held their fourth joint energy conference on October 18 in Denver. The conference focused on the outlook for the global crude oil market, renewable and energy transitions with the U.S. generation mix, energy finance and more.
Visit the conference page for full agenda.
The Federal Reserve Banks of Dallas and Kansas City will host their third joint energy conference on September 7 in Dallas. The conference will focus on global oil market dynamics, the long-term outlook for U.S. shale, and U.S. energy trade flows. Participants are business leaders, central bankers, government officials, academics and financial market representatives.
- Robert S. Kaplan, Federal Reserve Bank of Dallas
- John Auers, Turner, Mason & Co.
- Linda Capuano, U.S. Energy Information Administration
- Willie Chiang, Plains All American Pipeline
- Helima Croft, RBC Capital Markets
- Greg Determann, JPMorgan Chase
- Tom Jorden, Cimarex Energy
- Ed Morse, Citigroup
- C.H. “Scott” Rees III, Netherland, Sewell & Associates
- Kate Richard, Warwick Energy Group
- Ron Ripple, University of Tulsa
- Mark Schwartz, S&P Global Platts
- Torsten Sløk, Deutsche Bank
The Federal Reserve Banks of Kansas City and Dallas held their second joint energy conference on Sept. 22, 2017, which focused on global oil supply dynamics, the global oil demand outlook, and the oil and gas regulatory environment.
The Oklahoma City Branch of the Federal Reserve Bank of Kansas City hosted research economists from across the Federal Reserve System and other central banks at the Federal Reserve System Energy Meeting in September.
The Federal Reserve Banks of Dallas and Kansas City held their first joint energy conference, which focused on the key drivers of recent oil price movements and their implications for the energy industry, the financial sector and the broader economy. Top leaders from academia, business and government presented and discussed their views on these topics.