Tight oil gains will account for the majority of U.S. production growth over the next two decades, according to the U.S. Energy Information Administration.

The reference case outlined in the EIA’s most recent Annual Energy Outlook 2017 (AEO2017) projects U.S. tight oil production to grow by more than 6 million during the next ten years.

Those gains are expected to account for the majority of projected U.S. oil production growth during that period.

After 2026, tight oil production is forecast to hold relatively stable through 2040 as well productivity declines and tight oil development “moves into less productive areas,” the EIA said.

The EIA currently expects U.S. oil production will grow from 18.22 million quads in 2017 to  21.56 million quads in 2040.

Image courtesy of the U.S. Energy Information Administration.

U.S. oil production is expected to decline after 2040 and retreat below the 20.6 million quad mark in 2050.

In 2015, tight oil production climbed to 4.9 million bpd and accounted for more than 50 percent of total U.S. production.

In the agency’s reference case, tight oil production from the Eagle Ford Basin begins to decline in 2020 while production from the Bakken begins to fall in 2030.

Production in the Permian Basin, an area that includes the Austin Chalk, Spraberry, Avalon/Bone Spring and Wolfcamp plays, remains “relatively high” through 2040, the IEA said.

The agency said that the multiple staked plays and greater geographic extent of the Permian will provide drillers “more opportunities for continued long-term development” compared to the Eagle Ford and Bakken.

The AEO2017 also includes two side cases that apply alternative assumptions regarding technological advances and resource availability.

In the high oil and gas resource and technology case, that uses more optimistic technology and resource assumptions, tight oil reaches 11 million bpd by 2035.

The EIA said that production scenario would be driven by higher well productivity that reduces development and production costs, spurring additional resource development.

At that level, tight oil production would account for 66 percent of total U.S. production, as higher well productivity reduces development and production costs that would encourage additional resource development.

In the low oil and gas resource and technology case, that applies more pessimistic technology and resource assumptions than the reference case, tight oil provides less than half of total oil production after 2030.

Under the low oil and gas resource case, total U.S. oil production in 2040 would be “well below its current level,” the EIA said.

The agency also proposed two different scenarios that account for potential changes in commodity prices.

In the AEO2017 high oil price case, where world oil prices rise rapidly and are sustained at higher levels, oil production increases to 13 million bpd by 2021 before falling to 10.5 million bpd by 2040.

“Despite reaching a higher production level faster, total cumulative production through 2040 is lower in the High Oil Price case compared with the slow but steady production increase High Oil and Gas Resource and Technology case,” the EIA said.

In the AEO2017 low oil price case, sustained low prices cause oil production to slide below 8 million bpd by 2022 and then gradually decline to 7 million bpd by 2040.


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