US well-placed for shale revolution If they ever make a movie about how the US is shifting from energy importer to potential exporter, some craggy character actor will need to play Henry Bakken. It was on the North Dakota homesteader's land in the 1950s that the transformation in US energy fortunes arguably started with the discovery of the Bakken shale formation, which could contain the equivalent of 3.6bn barrels of oil. There is a lot of hype about this US transformation and its likely impact on the global economy and oil market. But it is happening - maybe faster than investors think. In its latest energy outlook this week, BP predicts the US will be 99 per cent self-sufficient in energy by 2030. The International Energy Agency says the US will be the biggest oil producer by 2020, overtaking Russia and Saudi Arabia, thanks to surging production of "tight oil," as oil from shale is called. That will mirror the current boom in shale gas production. There are bigger reserves than Bakken in the US, and there are more shale deposits in China than in the US, but America is at the forefront of the shale revolution for a number of important above-ground reasons. First, it has the exploration and production capacity. Shale is being developed not by traditional oil multinationals but by smaller companies. Continental Resources, Whiting Petroleum, Hess and a few others have developed Bakken, exploiting the high oil price to raise finance. The US has existing infrastructure - railroads, pipelines, oil services. As BP notes, more wells were drilled in Bakken in 2012 than in Canada. And the US oil industry has the deep pockets needed to get at the stuff. There are risks to investing in shale oil, even beyond the geostrategic, environmental and oil price issues. The most important rests on how sustainable this transformation is. Over-optimism is a feature of new oil discoveries, and the cost of extracting oil from shale is high. Still, the trend favours the US. Since 2005 it has cut oil imports from 12.5m to 7.5m barrels a day. Henry Bakken might be surprised by that, but pleased, too.