U.S. shale oil production in the next decade, which will constitute most of U.S. oil production, will increase to more than 6 million barrels per day (bpd), U.S. Energy Information Administration (EIA) announced Monday.
The Administration's recently released Annual Energy Outlook 2017, which presents projections of U.S. energy markets through 2050, forecasted that shale oil production will remain constant between 2026 and 2040.
Since 2010, shale oil production has increased, making up more than 50 percent of total U.S. oil production in 2015 and reaching 4.9 million barrels per day (bpd).
The Annual Energy Outlook 2017 projected that the increase in shale oil and overall U.S. oil production will continue through to around 2030.
The increase in recent years was driven by technological improvements that have reduced drilling costs and improved drilling efficiency in major shale plays such as the Bakken, Eagle Ford, and the Permian Basin, the statement continued.
Bakken and Eagle Ford are two of the largest tight oil regions in the country while the Permian Basin has more geographic extent and contains multiple stacked plays, providing drillers with more opportunities for continued long-term development.
However, shale oil production in these two regions are expected to decline after 2020 and 2030, but will remain relatively high after 2030 through 2040, according to the report.
The Administration also projected for two other scenarios based on technological advances and resource availability, which led to very different outcomes for shale oil production.
In the high oil and gas resource and technology scenario, shale oil would reach 11 million barrels per day by 2035, or 66 percent of total U.S. production. This assumption was based on the fact that higher well productivity reduces development and production costs, spurring additional resource development.
In the low oil and gas resource and technology case, shale oil would provide less than half the total oil production after 2030, and total U.S. oil production in 2040 is projected to be well below its current level.
Lastly, projected oil production in the U.S. is also seen as sensitive to the path of world oil prices. In the high oil price scenario, oil production is set to increase to 13 million barrels per day by 2021 before declining to 10.5 million barrels per day by 2040.
The Administration noted that in this scenario, total cumulative production through 2040 is lower despite reaching a higher production level faster, compared with the slow but steady production increase high oil and gas resource and technology scenario.
On the other hand, in the low oil price case, sustained low prices is forecasted to lead oil production to fall below 8 million barrels per day by 2022 and to gradually decline to 7 million barrels per day by 2040.
By Ebru Sengul