The Oil Supply Picture, Post-Spill

Energy experts, for the most part, say it is too early to say. Much depends on how long a moratorium on new deepwater drilling will last. Last month President Obama extended an earlier moratorium, and the long-term future of deepwater drilling in the United States may depend on the findings of a new bipartisan commission studying ways to prevent future disasters.

But in a report [pdf] issued on Thursday, the International Energy Agency, an intergovernmental group that studies energy policy for industrialized nations, put out some preliminary projections on the disaster’s impact. The group projects that a one- to two-year delay for all planned new deepwater oilfield projects in the gulf could reduce daily production by 100,000 to 300,000 barrels a day by 2015. At the high end, that would be nearly 18 percent of current production in the gulf and 5 percent of total domestic production, but less than 2 percent of total national oil consumption.

That’s nothing to sneeze at, but it’s not a game changer, at least not in the short term.

To make up the supply difference, the United States would need to drill more onshore and probably import more from OPEC and perhaps from Canada in the form of oil sands. Tighter supplies could mean higher prices too, though much will depend on the health of the American and world economies.

One reason that the immediate impact would not be larger is because so much more oil is still coming out of new production in the gulf. According to new Energy Department estimates, this year domestic production will actually increase over last year — despite the moratorium – from 5.32 million barrels a day to 5.39 million barrels a day.

But then in 2011, with the moratorium, the department projects that production will ease to 5.38 million barrels a day. Still, that is still higher than 2008 production, when American industries and consumers were using more oil due to a stronger economy for most of that year.

As for the rest of the world, the I.E.A. noted that offshore drilling countries like Canada, Britain, Norway, Brazil and China are all “examining existing procedures in light of the disaster.” The report warned that a further 550,000 barrels a day of anticipated production growth from 2009 to 2015 in deepwater drilling in Brazil, Angola and Nigeria could be at risk, although “there are no current indications that permitting in these countries is likely to be affected.”

NyTimes