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Exciting as Britain’s latest shale gas estimate is – 47 years’ supply or more – it pales beside what is happening in the United States.

In the US shale gas is old hat; it’s the shale oil revolution that’s proving a world changer, promising not just lower oil prices worldwide, but geopolitical ripples as America weans itself off oil imports and perhaps loses interest in the Middle East.

One of the pioneers of the shale gas revolution, Chris Wright, of Liberty Resources, was in Britain last month. It was he and his colleagues at Pinnacle Technologies who reinvented hydraulic fracturing in the late 1990s in a way that unlocked the vast petroleum resources in shale.

Within seven years the Barnett shale, in and around Forth Worth, Texas, was producing half as much gas as the whole of Britain consumes. And the Barnett proved to be a baby compared with other shales.

Like many shale entrepreneurs, Mr. Wright is now spending a lot of time in North Dakota drilling for oil. The success of America’s shale gas revolution drove the gas price so low that in 2010 most drilling rigs switched to looking for oil. With spectacular results.

A new report (The Shale Oil Boom: a US Phenomenon) by Leonardo Maugeri of Harvard University, sets out just how astonishing this second shale revolution already is.

After falling for 30 years, US oil production rocketed upwards in the past three years. In 1995 the Bakken field was reckoned by the US Geological Survey to hold a trivial 151 million barrels of recoverable oil. In 2008 this was revised upwards to nearly 4 billion barrels; two months ago that number was doubled. It is a safe bet that it will be revised upwards again.

The big reason for the upwards revisions is technology rather than discovery. Thanks to faster and cheaper drilling (which means less-rich rocks can be profitable) and things such as "zipper fracturing", where two parallel wells are drilled and alternately fractured to help to release oil for each other, the oil recovery rate is rising from 2 per cent towards 10 per cent in places. Gas is now nearer 30 per cent. Well productivity has doubled in five years.

Now the Bakken is being eclipsed by an even more productive shale formation in southern Texas called the Eagle Ford. Texas, which already produces conventional oil, has doubled its oil production in just over two years and by the end of this year will exceed Venezuela, Kuwait, Mexico and Iraq as an oil "nation".

Then there’s the Permian Basin in west Texas, which looks as big as the other fields, and the Monterey shale in California – the source rock for all California’s ordinary oilfields – which, at 15 billion recoverable barrels, could be bigger than the Bakken and Eagle Ford combined, according to a new report prepared for the Energy Information Administration.

The numbers are so large they are almost ludicrous. Predictions that the oil supply in the US would peak, loud a few years ago, are a distant memory.

On the ground, shale oil wells look much the same as shale gas ones. Both use pressurized water and sand with a smidgen of kitchen-sink additives to crack the rock a mile underground. Even in Texas, only 1 per cent of water consumption is used for hydraulic fracturing.

Aquifer pollution, radon pollution, earthquakes you can sense and water disposal are all so far non-problems. Of course, oil means carbon dioxide emissions, but at least it might put the brake on biofuels like ethanol, the most water-intensive, energy-inefficient, land-grabbing, hunger-causing way of driving cars yet devised.

Refineries in Texas are retooling to cope with this glut of lighter crude oil; chemical plants are being built to use the flood of cheap ethane (the raw material for many synthetic substances) that comes with shale oil and gas.

Some still think this is a temporary bubble, and that the rapid "decline rates" of shale oil wells – the production rate usually halves after the first year – will cause production to tail off. They said the same about shale gas too. But fast-falling costs meant that shale gas drillers just kept on drilling new wells to maintain production even as gas prices fell. Companies went bust by the dozen, but consumers got the benefit.

Dr. Maugeri calculates that at $85 a barrel most shale oil wells repay their capital costs in a year. He estimates that even if oil prices fall steadily to $65 in five years, shale oil production will treble in the US because of increasing productivity per well and the easing of transport bottlenecks. By 2017, he thinks, America will be producing nearly 11 million barrels a day equal to its previous peak in 1970. It would need much less in the way of imports. US oil imports peaked at 60 per cent in 2005 and will be below 40 per cent this year.

Internationally, the effect is very different for oil compared with gas. Gas is costly to export by sea, requiring liquefaction. This roughly doubles the cost of it, meaning that America’s cheap shale gas boosts its economy at home, and gives it a competitive advantage in attracting energy-intensive industries. (US gas prices are a third or a quarter of what they are in Britain.) Mexico, too, is benefiting because of having a land border with America and pipelines.

Oil is different. Although the two world oil benchmarks, West Texas Intermediate and Brent Crude, are diverging in price at the moment, this is unlikely to last. Oil is cheap to transport and has a world price. So whereas America’s shale gas revolution hurts the British economy, its shale oil revolution helps.

There would be losers. America’s falling appetite for imports may hit Nigeria and Angola harder than the Middle East because of the types of oil they produce, while Canada and Venezuela, whose tarry oil sands are high-cost, would also suffer if oil prices fell. But every oil producer would eventually feel the effect of this falling US demand, so there is no doubting the downward pressure on world oil prices that this revolution is likely to cause.

Last week, John Llewellyn, a former head of forecasting for the OECD, wrote a report for Puma Energy predicting that oil prices could halve to $50 a barrel by 2020. Of course, all sorts of things could blow that prediction off course – political upheavals in producer nations such as Iran, Brazil or Venezuela, faster growth in China and India, an environmentalist backlash in America.

Yet there is little doubt that the inevitably ever-rising price of fossil fuels as they run out is, once again, proving to be a myth.

Matt Ridley is the author of The Rational Optimist, and as 5th Viscount Ridley is a Member of the British House of Lords.