America's oil boom over the past few years has been nothing short of a remarkable turnaround. After decades of declining oil production, American producers reversed the course of the nation a few years ago thanks to the technological advances of horizontal drilling and hydraulic fracturing. The breathtaking rise of oil production as a result of these advances has reversed decades of declines as we see in the chart below.

U.S. Crude Oil Field Production data by YCharts

However, now that the price of crude oil has been cut in half many would argue that the great American oil boom is now a bust and that everything forecasters foresaw for the future of America's oil industry has gone up in smoke. They'd argue that this time is different and that the bursting of the oil price bubble means that America's dream of being not only energy independent, but an energy superpower has come to an abrupt end. That certainly begs this question: Were forecasters wrong in predicting the energy boom in the first place, or is the market simply forgetting the history of the oil industry's cyclical past of booms, busts, and recoveries?

A trip down memory lane
In late 2013, the International Energy Agency, or IEA, said that the U.S. will surpass Russia and Saudi Arabia to become the world's top oil producer by 2015. Further, it estimated that America would be close to energy self-sufficiency in the next two decades. It also saw oil prices topping $128 per barrel by 2035 as a 16% increase in global oil consumption would be more than enough to sop up increased oil supplies from America and Brazil, which was seen tripling its output.

That forecast was reiterated in the middle of last year. The IEA saw no end to the U.S. oil boom, and forecast that production would continue to surge until it topped 13.1 million barrels a day in 2019. From there, production would plateau at that level through the next decade before trailing off at the start of the 2030s at which time America would finally be unseated as the world's largest oil producer.

Now, just a few short months later those forecasts are apparently out the window as the unanticipated sell-off in oil prices is thought to spell the end of the American oil industry. Unless of course we consider the fact that the oil industry's history is littered with booms and busts followed by more booms and busts.

Oil prices are crazy but surprisingly predictable
After what seemed like an eternity of relative stability with oil prices, the market has been blindsided by the remarkable crash in prices over the past few months. However, historically, oil prices are known for crazy volatility, just take a look at this chart.

Brent Crude Oil Spot Price data by YCharts

It's pretty clear from that chart that oil prices have a history of spiking, busting, and recovering with a general upward bias. Almost every time there has been a deep correction in oil prices they've recovered only to rally higher on the next burst.

That being said, this doesn't mean that the current price bust won't last a long time, nor that it won't have a lasting impact on the U.S. shale industry. The rapid rise in U.S. oil production over the past few years was largely fueled with debt as oil companies borrowed billions to drill new wells as it was a largely held belief that oil prices would stay rather robust for quite some time. With higher oil prices no longer in the cards a lot of this debt could go bust, causing a big default wave to hit the industry in the next year or so. Clearly, the energy industry could be in for a real rough patch if oil prices don't show any signs of recovery within the next few months. However, as the history of oil prices shows these price busts do tend to be self-correcting, which suggests another leg to the boom could be on the way at some point in the future.

Investor takeaway
Lower oil prices undoubtedly will slow down America's oil boom. The rapid growth in production over the past few years could plateau over the next year and even taper off if oil prices don't recover for a while. However, that doesn't necessarily mean the boom has gone completely bust as the oil is still there, producers know how to get it, and costs have come down so much that the oil is cheaper to access than ever before. In all likelihood the correction will force the IEA, and other forecasters, to stretch out the numbers a bit as the U.S. might not peak quite as quickly. But at the same time, it might hold its place at the top for a lot longer than previously thought.