Study says shale oil boom could boost world GDP

A global boom in shale oil production similar to the one already underway in the United States could bring down the price of crude as much as 40 percent and add up to 3.7 percent to world economic output, a study released Thursday said. A study by the PwC consultancy estimated that global production of shale, or tight oil, could gush up to 14 million barrels per day by 2035, or about 12 percent of the world's total oil supply. It estimated this would cut 25 to 40 percent off the projected price of $133 per barrel in 2035 by the US Energy Information Administration, which still assumes low levels of shale oil production. PwC said "we estimate this could increase the level of global GDP in 2035 by around 2.3-3.7 percent," which is worth $1.7-$2.7 trillion (1.3-2.0 trillion euros) at today's global gross domestic product levels. The consultancy said the widespread tapping of shale oil "would revolutionise global energy markets, providing greater long term energy security at lower cost for many countries." Technological breakthroughs in recent years have allowed the recovery of oil and natural gas from shale rock formations that previously could not be exploited. Tapping such "unconventional" resources has led to a boom in US oil production, hitting 910,000 barrels per day in January according to estimates by the International Energy Agency, the highest level in over 30 years. PwC noted this has led to US crude oil prices falling compared to global prices. A boom in shale gas production has also led to far lower natural gas prices in the United States than in other countries.