Extracting shale gas and oil is likely to make the US self-sufficient in energy supplies within a decade – and Britain is investing heavily in fracking as well.
Experts are crunching the numbers on what this will mean to their economies – and those of the countries that supply oil and gas.
Will the US and Britain become self-sufficient in oil and gas?
Best current estimates predict almost for the US but not for the UK, but their falling imports will impact the price of oil
How much oil is shale producing?
Shale oil production has risen from zero to a million barrels a day in 24 months in the US.
Forecasts are for production to double again in two years and to hit 5 million barrels a day by 2020.
The latest US oil output figures show production climbed 14% to 6.5 million barrels a day – a new high, while demand is falling as drivers switch to more fuel efficient vehicles.
How will this affect oil prices?
Oil prices are expected to drop another $5 a barrel in 2013 – followed by another $20 or so drop in two years when production leaps.
Another factor is Iraq. Production virtually stopped because of the war but has slowly built up over recent years and supply is influenced by the US not OPEC.
Energy efficiency standards in the US and Europe is also encouraging a move to cleaner energy that will have a knock-on effect on demand for oil.
Where does this leave OPEC?
OPEC has traditionally controlled oil prices by manipulating production – reducing supply so other countries cannot build stockpiles and maintaining supplies at an optimum level for their economies.
The balance of power is moving away from the Middle East as more countries discover viable oil reserves – like Nigeria and Brazil – and others find fracking cost-effective.
While the US is the world’s largest oil guzzler, demand in China is steadily rising – growing by 28% in recent years. China will look to buy in oil stocks from the Middle East as an alternative market as US and European demand falls.
What does cheaper oil and gas mean for Britain and the US?
The oil and gas bonanza has several side effects for their economies. Britain expects to create up to 60,000 new jobs from the oil and gas industry, while a massive oil rush has sparked a boom in North Dakota, USA.
Controlling oil and gas supplies also brings the cost of energy down for industry, allowing cheaper manufacturing and cheaper factory gate prices for exports.
