America's oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer.
Driven by high prices and new drilling methods, US production of crude and other liquid hydrocarbons is on track to rise seven per cent this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts.
"Five years ago, if I or anyone had predicted today's production growth, people would have thought we were crazy," says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.
The US Energy Department forecasts that US production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year.
That would be a record for the US and just below Saudi Arabia's output of 11.6 million barrels. Citibank forecasts US production could reach 13 million to 15 million barrels per day by 2020, helping to make North America "the new Middle East".
The last year the US was the world's largest producer was 2002, after the Saudis drastically cut production because of low oil prices in the aftermath of 9/11. Since then, the Saudis and the Russians have been the world leaders.
The United States will still need to import lots of oil in the years ahead. Americans use 18.7 million barrels per day.
But thanks to the growth in domestic production and the improving fuel efficiency of the nation's cars and trucks, imports could fall by half by the end of the decade.
The increase in production hasn't translated to cheaper gasolene at the pump, and prices are expected to stay relatively high for the next few years because of growing demand for oil in developing nations and political instability in the Middle East and North Africa.
Still, producing more oil domestically, and importing less, gives the economy a significant boost.
The companies profiting range from independent drillers to large international oil companies such as Royal Dutch Shell, which increasingly see the US as one of the most promising places to drill. ExxonMobil agreed last month to spend US$1.6 billion to increase its US oil holdings.
Increased drilling is driving economic growth in states such as North Dakota, Oklahoma, Wyoming, Montana and Texas, all of which have unemployment rates far below the national average of 7.8 per cent.
North Dakota is at three per cent; Oklahoma, 5.2 per cent.
Businesses that serve the oil industry, such as steel companies that supply drilling pipe and railroads that transport oil, aren't the only ones benefiting. Homebuilders, auto dealers and retailers in energy-producing states are also getting a lift.
IHS says the oil- and gas-drilling boom, which already supports 1.7 million jobs, will lead to the creation of 1.3 million jobs across the US economy by the end of the decade.
"It's the most important change to the economy since the advent of personal computers pushed up productivity in the 1990s," says economist Philip Verleger, a visiting fellow at the Peterson Institute of International Economics.
The major factor driving domestic production higher is a newfound ability to squeeze oil out of rock, once thought too difficult and expensive to tap.
Drillers have learned to drill horizontally into long, thin seams of shale and other rock that holds oil, instead of searching for rare underground pools of hydrocarbons that have accumulated over millions of years.
To free the oil and gas from the rock, drillers crack it open by pumping water, sand and chemicals into the ground at high pressure, a process is known as hydraulic fracturing, or "fracking".
While expanded use of the method has unlocked enormous reserves of oil and gas, it has also raised concerns that contaminated water produced in the process could leak into drinking water.
The most prolific of the new shale formations are in North Dakota and Texas. Activity is also rising in Oklahoma, Colorado, Ohio and other states.
Production from shale formations is expected to grow from 1.6 million barrels per day this year to 4.2 million barrels per day by 2020, according to Wood Mackenzie, an energy consulting firm.
That means these new formations will yield more oil by 2020 than major oil suppliers such as Iran and Canada produce today.
Whether the US supplants Saudi Arabia as the world's biggest producer will depend on the price of oil and Saudi production in the years ahead.
Saudi Arabia sits on the world's largest reserves of oil, and it raises and lowers production to try to keep oil prices steady. Saudi output is expected to remain about flat between now and 2017, according to the International Energy Agency.
But Saudi oil is cheap to tap, while the methods needed to tap US oil are very expensive. If the price of oil falls below US$75 per barrel, drillers in the US will almost certainly begin to cut back.
The International Energy Agency forecasts that global oil prices, which have averaged US$107 per barrel this year, will slip to an average of US$89 over the next five years — not a big enough drop to lead companies to cut back on exploration deeply.