Down and Dirty

America's homegrown shale-oil boom

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Source: U.S. Department of Energy

After years of decline, U.S. oil production is expected to grow...mostly because of new methods of recovery

Last year should have been a disaster for domestic oil production. The Deepwater Horizon spill has all but shut down new drilling in the Gulf of Mexico. Yet domestic crude-oil production actually rose by 150,000 barrels a day in 2010, enabling a small drop in imports even as demand is rising.

What's changed? High oil prices make it economical to squeeze crude out of oil-shale deposits that were long considered too expensive to be worthwhile. Using new drilling methods, like hydraulic fracturing--the technique that has fueled the shale-natural-gas boom over the past few years--producers are reviving flagging onshore domestic production. The new techniques have big downsides, namely high greenhouse-gas emissions. But they do mean more American oil: the conservative U.S. Energy Information Administration predicts that domestic production will increase by 500,000 barrels a day over the next decade, while more bullish industry analysts believe U.S. production could increase by as much as 2 million barrels a day. Either scenario would be a notable shift as conflict in the Middle East makes energy security a top concern.