I do not HATE Oil producers.. in fact some of my good friends are in the business.  However, that doesn't mean that I want to be put out of business myself..

US Crude Oil Production is on the rise..  


 
As amazing as it would have seemed a decade ago, US oil production is increasing at the fastest pace in US history. In the past 5 years US oil production has increased by 3.22 million barrels per day (bpd). The overall global oil production increase during that time was only 3.85 million bpd, meaning the US was responsible for 83.6 percent of the total global increase over the past 5 years.
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This resurgence in US oil production has had a number of implications. One has been that US oil imports have declined. Thus, even though the US has an oil export ban in place (which has had the impact of discounting US crude relative to globally traded crudes), global oil supplies have nevertheless increased as oil exporters sought other outlets to replace the declining US business. This has weakened the pricing power of OPEC.

Shale Oil Economics

The shale boom was enabled by high oil prices. The cost of production for shale oil is higher than for most onshore conventional oil, and therefore high prices were needed to encourage shale oil production. How high? Estimates vary, but a couple of years ago the marginal cost for shale oil was estimated to be around $100/bbl. That cost has been declining as drillers implemented improvements like multi-pad drilling, and today is probably ~$80/bbl. With the price of West Texas Intermediate hovering around $80/bbl, the market price of crude oil in the productive shale regions has slipped below $80/bbl (due to the need to transport it to market, it generally trades at a discount to WTI).

What does this mean? If the price of oil falls below the break even level for an extended period of time, marginal producers will begin shutting down and lower cost producers will likely reduce their spending on new exploration and drilling. The current expansion of US oil production would then stall sooner than expected.
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Their third option does not benefit US oil producers. Saudi could attempt to reduce the price of oil until shale oil production starts to become uneconomic. Saudi Arabia has been accused of using oil in the past as an economic weapon. In the present case, it would mean short term pain for OPEC, but if they can stop the momentum of the shale oil boom then OPEC would regain some of its pricing power. Saudi Arabia reportedly needs oil prices between $80 and $90/bbl to balance its budget, and if they can short-circuit the US shale boom they will have more influence in ensuring they can set the price where they want.

This third option looks increasingly like Saudi Arabia’s strategy. Reuters reported this week that Saudi Arabia has been quietly telling the oil market that it would accept oil prices as low as $80 for up to two years. If this is the case, and Saudi Arabia manages to hold oil prices at $80, the result may be lower US oil production in future years than would have otherwise been the case. Saudi Arabia would once more be entrenched as the most powerful country when it comes to setting the price of oil. 

http://www.energytrendsinsider.com/2014/10/15/saudi-arabia-still-calling-the-shots/#more-17194

I believe Robert has a good handle on the situation..  US Oil Production has mainly come from 2 area's.. North Dakota is up about a myn bbls per day since 2010..

2010	236	261	278	285	299	315	322	330	343	344	357	344
2011	343	349	360	351	364	386	425	446	464	490	511	536
2012	547	579	580	611	644	664	677	704	729	749	735	769
2013	739	782	787	794	812	824	874	913	935	946	979	930
2014	937	953	976	1,003	1,040	1,093	1,114	1,132
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPND2&f=M While Texas is up about 2 Myn bbls per day since 2010..   2010 1,098 1,121 1,137 1,137 1,146 1,139 1,153 1,167 1,191 1,217 1,243 1,279   2011 1,281 1,226 1,336 1,347 1,392 1,400 1,436 1,487 1,533 1,592 1,653 1,684   2012 1,716 1,764 1,791 1,867 1,911 1,947 1,999 2,052 2,089 2,153 2,215 2,234   2013 2,275 2,339 2,387 2,415 2,486 2,519 2,572 2,602 2,648 2,656 2,783 2,825   2014 2,863 2,907 2,954 3,000 3,045 3,090 3,136 3,182           http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPTX2&f=M    The rest of the country is mostly sideways to flat..  http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbblpd_m.htm Canadian production since 2010 has gone from 3.44 myn bbls per day to a little over 4.07 myn bbls per day up about 600 k bbls per day.. US Ethanol production is around 915'ish k bbls per day..  So Texas up 2 myn N Dakota up 1 myn Canada up .6 myn.. and US Ethanol up.. .5 myn or so since around 2005'ish.. those 4 factors are in play and probably account for 90% of the World's growth in liquid energy production. All of which has allowed the US to become a Crude Exporter again.. http://www.eia.gov/todayinenergy/detail.cfm?id=18631 So I don't hate Texas.. nor it's oilmen.. In fact like Ethanol Insider says below.. "ain't all bad"  I do agree with Rapier that as prices fall.. production GROWTH will be curtailed.. to even rolled back DEPENDING upon prices and economic's.. and it's possible that Keystone does not make economic sense.. which could put us in a bad spot for the next crisis and Oil price shock coming down the road... jmho.. I could be wrong. Keystone probably should get built.. but Ethanol needs to stand it's ground.  The Iowa Caucus for 2016 will ensure that.. as will I.