Shale Oil and Oil Prices

James Hamilton points out why increased U.S.crude oil production hasn't brought lower gasoline prices for consumers:

U.S. production of oil from tight formations is up 3.5 mb/d since 2005, and yet total global field production of crude from all sources is only up 2.3 mb/d. In other words, more than all of the increase worldwide over the last 8 years is attributable to U.S. tight oil production. Without U.S. tight oil, world oil production would be lower today than it was 8 years ago.
2.3 mb/d represents 3% of 2005 world field production. For comparison, world GDP grew by 28% since 2005. If oil prices had remained stable, with that much more income we would have expected much more than a 3% increase in quantity of oil demanded globally. The price of oil had to rise sufficiently– namely, to above $100/barrel– to restrain global oil demand to grow at a very slow rate over the last 8 years.
If the U.S. continues to be the only source of global growth in oil production, and if the world economy continues to expand at the pace it has over the last decade, oil prices are headed further higher. But how much promise does fracking hold outside the U.S.? The EIA believes Russia may have even more potential than the U.S., and Russia produced 120,000 b/d using horizontal fracturing methods in 2013. China may have about half the potential as the U.S. in shale oil and even more with shale gas, and is working hard to make that promise a reality.

I covered some of this last week, but I thought this graph told an interesting story of the shale oil future:

 That's from the North Dakota Department of Mineral Resources,Oil and Gas Division.  They've been among the biggest cheerleaders for the shale boom, so this would have to be a reasonable source of data.  I guess Sarah Palin will be happy (even if we aren't torturing anybody) because our future, just to slightly increase production, is "drill, baby, drill."