The first four chapters of Part II are mainly focused on developments in the US, which is natural since the shale revolution is almost purely a US phenomenon until now. The story has been told in numerous recent books on the subject (e.g., Zuckerman, 2013; Gold, 2014). But we believe the revolution will spread globally, as argued in Chapters 11 and 12. Only then will it provoke the deep global changes whose repercussions are discussed in Part III.

The purpose of the present chapter is to review the US attainments so far for shale oil, contrasting the historically declining output levels with the recent production boost as the revolution gathered pace. We also record the changes in the US extractable resource wealth after the shale oil resources became economical. Finally, we explore the impact of the shale revolution on the US economy, and the envisaged impacts on energy markets so far, in the US and globally.

THE BEGINNING OF A REVOLUTION

The shale revolution started in the US less than ten years ago; first with fast rising production of unconventional gas, then with unconventional oil following in the steps of gas some years later. Progress is still in its infancy, but knowledgeable observers point to substantial changes for the US and the ROW over coming decades.

The revolution is the result of technological progress that has made vast dormant oil resources economically exploitable. The oil resources in focus of this chapter typically lack strict definitions and often overlap. They are found in shale, sandstone and carbonate formations, and are often referred to as tight oil. What they all have in common is that they are characterized by low permeability, yielding commercially insufficient flows from vertical drilling commonly applied to traditional oil formations. To simplify, we adopt recently spreading conventions and refer in what follows to all these resources as shale oil.

At this time, all shale oil resources are referred to as “unconventional.” However, it must be underlined that the unconventional universe comprises many resource categories (based on geological, technical and commercial factors) other than what we have defined as shale. We endeavor to use the unconventional concept sparingly because we find it subjective and unstable over time.