U.S. Oil Production Closing In on Record

MOORPARK, CA - SEPTEMBER 23: Smoke blows past oil wells at sunset on the eastern flank of the 16,000-plus-acre Guiberson fire, burning out of control for a second day as Red Flag warnings continue in southern California on September 23, 2009 near Moorpark, California. A Red Flag warning means critical wildfire weather, based on a combination of high temperatures, low humidity and Santa Ana winds, is occurring. Several large wildfires broke out in triple-digit temperatures on the first of Red Flag warnings.
National Journal
Ben Geman
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Ben Geman
Dec. 16, 2013, 6:21 a.m.

U.S. crude-oil pro­duc­tion will soar for sev­er­al more years to nearly match its 1970 re­cord in 2016, ac­cord­ing to fed­er­al pro­jec­tions re­leased Monday that un­der­score seis­mic shifts in the coun­try’s en­ergy land­scape.

The fed­er­al En­ergy In­form­a­tion Ad­min­is­tra­tion’s latest An­nu­al En­ergy Out­look pre­dicts that daily U.S. pro­duc­tion will rise to reach 9.5 mil­lion bar­rels per day in 2016, and then will level off be­fore slowly fall­ing after 2020.

Mean­while, U.S. nat­ur­al-gas pro­duc­tion, already at re­cord levels, is slated to keep soar­ing, ac­cord­ing to the an­nu­al re­port from the En­ergy De­part­ment’s in­de­pend­ent stat­ist­ic­al arm that fore­casts en­ergy trends through 2040.

The re­port pre­dicts a 56 per­cent in­crease in nat­ur­al-gas pro­duc­tion between 2012 and 2040, and it also charts rising gas ex­ports.

It pre­dicts that the U.S. will be­come a net ex­port­er of li­que­fied nat­ur­al gas in 2016 and an over­all net ex­port­er of gas in 2018—two years earli­er than last year’s re­port fore­casts.

The re­port, to be sure, is only EIA’s so-called ref­er­ence case—it as­sumes cur­rent laws and policies re­main un­changed. A wider range of fore­casts will ap­pear in an ex­pan­ded ver­sion of the re­port next spring.

But it non­ethe­less provides new evid­ence of a surge in U.S. oil and nat­ur­al-gas de­vel­op­ment that’s prompt­ing new polit­ic­al battles, such as wheth­er to ease heavy re­stric­tions on U.S. crude-oil ex­ports

“EIA’s up­dated ref­er­ence case shows that ad­vanced tech­no­lo­gies for crude oil and nat­ur­al gas pro­duc­tion are con­tinu­ing to in­crease do­mest­ic sup­ply and re­shape the U.S. en­ergy eco­nomy as well as ex­pand the po­ten­tial for U.S. nat­ur­al gas ex­ports,” said EIA Ad­min­is­trat­or Adam Siem­in­ski in a state­ment.

“Grow­ing do­mest­ic hy­dro­car­bon pro­duc­tion is also re­du­cing our net de­pend­ence on im­por­ted oil and be­ne­fit­ing the U.S. eco­nomy as nat­ur­al-gas-in­tens­ive in­dus­tries boost their out­put,” he said.

Ana­lysts are play­ing catch-up as de­vel­op­ment surges.

For in­stance, the “ref­er­ence” case in the 2013 ver­sion of the re­port pre­dicted that U.S. crude-oil pro­duc­tion would rise to 7.5 mil­lion bar­rels per day in 2016 be­fore lev­el­ing off and then start­ing to de­cline a few years later, a pro­jec­tion far be­low the fore­cast of 9.5 mil­lion bar­rels in the new re­port.

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