Most Americans will by know by now that shale has made an impact on our country’s oil and gas production, but the scope of this energy revolution might surprise many. More than half of the country’s crude is now fracked from shale formations, and as the Energy Information Administration reports, oil drilled from those reserves will make up the majority of expected production increases over the next 25 years:
In the Reference case, tight oil production from the Eagle Ford and Bakken—two of the largest tight oil regions in the country—begins to decline after 2020 and 2030, respectively. Production in the Permian Basin (which includes the Austin Chalk, Spraberry, Avalon/Bone Spring, and Wolfcamp plays) remains relatively high through 2040. Compared with the Eagle Ford and Bakken, the Permian Basin has more geographic extent and contains multiple stacked plays, providing drillers with more opportunities for continued long-term development.
In the High Oil and Gas Resource and Technology case, which uses more optimistic technology and resource assumptions, tight oil reaches 11.0 million b/d by 2035, or 66% of total U.S. production, as higher well productivity reduces development and production costs, spurring additional resource development.
It’s notoriously difficult to predict these kinds of production numbers, and that’s especially true when it comes to shale drilling—after all, ten years ago, who could have predicted we’d be where we are today? The fracking industry itself is young, and it’s still ironing out kinks and experimenting with new ways to bring costs down and efficiencies up. Our shale experience was created from the combination of two different technologies—hydraulic fracturing and horizontal well drilling—and the innovative spirit that kicked off this extraordinary energy revolution still drives the industry to find better ways to frack.
It’s interesting to note, too, that the EIA has projections that account for different oil price scenarios. Crucially, in the high oil price scenario, American oil production is expected to top 13 million barrels per day (bpd) by 2021 (we’re currently sitting at just under 9 million bpd). OPEC and a collection of other petrostates just cut output by 1.2 million bpd in the hopes of inducing a price rebound, but these numbers are something of a nightmare for those regimes. Even if those petrostates are successful in pushing prices back up to where they once were, the U.S. will be ready to step in and contribute more than 4 million bpd more than we currently are.