Still.. this is a good thing, no?
To the extent the increase has not benefited US consumers, not necessarily. Further, to the extent that like you, US consumers have been led to believe there is no looming problem in supply and even, amazingly, to disregard the continued high price of unleaded and diesel, I think yes, it is a problem.
I don't have an opinion on natural gas. It's hard to export gas number one, so the market in the US being isolated has caused prices to fall with the increase in production. But the increase in production was partly a result of a "land rush" with the "model" being buy leases and flip them to the next sucker at a higher price. Exactly like the Miami condos in 2005 - they are condos but are they condos worth a million? I think the the reserves are distorted in all sorts of ways, up and down as prices fluctuate and more and fewer companies sell leases acquired early in order to develop more promising property they already control. In fact in order to fulfil lease contracts, drillers are required to drill it or lose it, I don't know to what extent that has increased the glut of nat gas. Additionally the SEC has relaxed rules on what can be reported as reserves allowing companies to include not just "proven" reserves where wells have actually produced oil and gas but also probable reserves they "think" will.
I suppose it's from shale? And that will only increase. And there's worldwide shale, too.
There is no worldwide tight oil & gas boom for several reasons: A) in the US citizens own the mineral rights and most other places the government owns those rights, B) half the drilling rigs in the world are in the US and 80% of them are devoted to horizontal drilling now, and C) In the US there are hundreds of small "mom & pop" drilling outfits where overseas oil companies are mostly large NOC and Internationals. That last reason is a big deal it seems to me because a tight well is a universe all to itself – where the typical oil producing region sits over a "pool" of oil that is managed as one large resource - perfect for a large corporation or national oil company with virtually unlimited funds, a tight well only extends only as far as the fractures. It can be started and shut down in a matter of weeks whereas the giant oil fields are managed by periods of decades.
Also remember there are many shale deposits in the US that don't frack. The larges I think is the Monterey in CA. Fracking doesn't work there. There is a reason that most of the "tight" oil in the world comes from 14 counties in the US. Horizontal drilling and fracking has been around a while, and the places where tight oil can be found has been known longer. Even though fracked wells costs several times more than a conventional well and even though the well never produces as much as a conventional well initially and even though it declines precipitously from the first day, they are the best thing going because they're the only thing going.
None of that makes a very good headline though.
The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves -- in their separate, and individual capacities.
-- Abraham Lincoln, Fragment on Government (July 1, 1854)
