(OILPRICE) — We’ve been seeing oil over $100 a barrel and gasoline above $3.40 a gallon for much of the last 3 years. Those prices would have shocked many Americans a few years ago, but have now become the new normal. What has changed and what hasn’t as a result?
One effect of higher oil prices has been a surge in U.S. oil production coming from horizontal fracturing of shale and other tight formations.
These methods would not have been profitable at the oil prices of 2004, and it’s not clear how long the new supplies will last. But for now they are making an important contribution to U.S. income and employment.