“There was also an excellent piece by Matt Ridley on shale oil last week which increased my own understanding in some specific areas. It may also be of interest to the collective.”

Eoin Treacy's view Thank you for this enthusiastic article which may be of interest to subscribers. Here is an important section:

Thanks to faster and cheaper drilling (which means less-rich rocks can be profitable) and things such as “zipper fracturing”, where two parallel wells are drilled and alternately fractured to help to release oil for each other, the oil recovery rate is rising from 2 per cent towards 10 per cent in places. Gas is now nearer 30 per cent. Well productivity has doubled in five years.

Now the Bakken is being eclipsed by an even more productive shale formation in southern Texas called the Eagle Ford. Texas, which already produces conventional oil, has doubled its oil production in just over two years and by the end of this year will exceed Venezuela, Kuwait, Mexico and Iraq as an oil “nation”.

Then there's the Permian Basin in west Texas, which looks as big as the other fields, and the Monterey shale in California — the source rock for all California's ordinary oilfields — which, at 15 billion recoverable barrels, could be bigger than the Bakken and Eagle Ford combined, according to a new report prepared for the Energy Information Administration.

Political lobbying represents one of the greatest threats to the USA's ability to develop its natural resources using the technological prowess the country is so noted for. Texas and California may as well be in different countries such is the difference in their respective energy policies. Texas has long fostered wildcat explorers and innovators while California prefers to believe in the ability of technology to overcome the need for fossil fuels regardless of the impact this has on pricing and how long it may take.

Solar technology holds great promise over the medium to long-term but in the meantime producing as much cheap oil and gas will be essential to enhance economic productivity and to tackle the USA's trade and budget deficits.