How do you tell if we have a revolution in either Resource X or Product Y? Simple. Volume goes up and price goes down. Think computing power. Now that’s a revolution.
So do we have a revolution in the production of tight oil in the U.S.? Let’s take a look at the projections of the U.S. government agency the Energy Information Administration (taken from an EIA staffer’s presentation to accompany the publication of the Annual Energy Outlook 2013; click for larger image):
So according to the EIA’s numbers, we have a five-year bump in production which puts us back to the level of output in 1990 and then a gentle decline out to the year 2040. Good, but hardly revolutionary.
And price (note in inflation-adjusted dollars)? Well, that goes up:
Risk and Well-Being 