Last year should have been a disaster for domestic oil production. The Deepwater Horizon spill has all but shut down new drilling in the Gulf of Mexico. Yet domestic crude-oil production actually rose by 150,000 barrels a day in 2010, enabling a small drop in imports even as demand is rising. What's changed? High oil prices make it economical to squeeze crude out of oil-shale deposits that were long considered too expensive to be worthwhile. Using new drilling methods, like hydraulic fracturing-the technique that has fueled the shale-natural-gas boom over the past few years-producers are reviving flagging onshore domestic production.
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