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Page added on July 9, 2014
US: Oil production in 2015 to be highest since 1972
U.S. crude oil production, rising steadily since 2008, is likely next year to hit its highest level since 1972 while Iraq’s output, despite unrest there, is expected to hold steady, according to a forecast Tuesday by the U.S. Energy Information Administration.
Spurred by the use of hydraulic fracturing or fracking in shale rock deposits, U.S. oil production has jumped from 5.0 million barrels per day in 2008 to 7.4 million last year and is expected to average 8.5 million this year and 9.3 million next year, according to the EIA, the analytical arm of the Department of Energy.
“Texas and North Dakota now account for almost half of total U.S. oil production,” said EIA Administrator Adam Sieminski, noting Texas’ monthly oil output recently topped 3 million barrels per day for the first time since 1977 and North Dakota’s oil production hit a record 1 million.
This boom, along with a rise in natural gas liquids production, has dramatically lowered petroleum imports. The share of U.S. liquid fuels consumption met by net imports, down from 60% in 2005 to 33% in 2013, is expected to fall to 22% in 2015, which would be the lowest since 1970.
The United States and Canada are expected to account for most of the world’s projected growth in production of oil and other liquid fuel through 2015 while China and less developed countries will drive most of the growth in consumption, according to the EIA’s July forecast.
“The conflict in Iraq is expected to limit previously forecasted growth in oil exports from that country,” says the EIA, adding it will reduce the surplus oil production capacity of the Organization of the Petroleum Exporting Countries and boost average Brent crude oil prices through 2015 more than previously expected.
The EIA is lowering its forecast for Iraq’s oil production growth by about 0.3 million barrels per day in both 2014 and 2015, expecting it will not exceed 3.3 million – its average level during the first half of this year. To offset this dip, it expects Saudi Arabia to maintain higher production through 2014.
Last month, Islamic Sunni militants seized control of Iraq’s northern city of Mosul. Yet most of Iraq’s oil production, which recently hit a 30-year high, has occurred in the south, and its exports are coming from terminals near the southern city of Basra.
Raad Alkadiri, a senior research director at IHS Energy, a consulting firm, said he expects oil and gas infrastructure in Iraq’s north “will be vulnerable to repeated attack,” but he doubts southern production and exports will be “directly affected.”
The EIA forecast also expects U.S. gasoline prices to fall in the next few months, dropping to $3.61 a gallon in September, while home electricity prices will rise 3% this year – the biggest increase since 2008. It expects U.S. coal production, which has generally been in decline, to rise 2.7% this year. It says the power sector is looking to coal to meet its electricity demand, because natural gas prices jumped nearly 30% from last year.
9 Comments on "US: Oil production in 2015 to be highest since 1972"
pctech on Wed, 9th Jul 2014 7:39 am
Unless US production reaches 18mb/d it’s really not that much to get excited about. It will provide some high quality jobs here though.
steve on Wed, 9th Jul 2014 8:32 am
I am just not ready for the STHTF so it buys more time….because when we go down it is going to be painful…
rockman on Wed, 9th Jul 2014 8:44 am
In 1972 US oil consumption was 15 million bopd and imports were 2 million bopd. IOW we imported about 13% of our oil consumption. The article points out that even after our production boom we’re still importing 33% of our consumption. Better the it has been but we’re still a long way from life in 1972. Of course the EIA says we actually imported 9.8 million bopd in 2013 which would mean it’s a lot closer to 50% then 33% but I’ll stick with their number.
The other difference between 1972 and today is that we are paying, even adjusted for inflation, 5X as much for oil now as then. Actually about 40X as much in nominal prices. IOW in 2013 $’s we were paying $40 million per day for our imports in 1972 compared to the $950 million we are sending overseas today.
Yep…it certainly isn’t 1972 all over again today. At least not in some important stats IMHO. LOL.
BTW remember what I’ve said about my first mentor warning me about PO in 1975? Seems like the stats above would give his words a fair bit of credibility.
rockman on Wed, 9th Jul 2014 8:48 am
Steve – US consumers went from paying around $225 million/year for their oil not too long ago to about $650 million/year today. I would say TSHHTF for a lot of folks already. You better watch you 6. LOL.
nony on Wed, 9th Jul 2014 10:30 am
There is an extra million or more bpd of net exports of refined products.
steve on Wed, 9th Jul 2014 2:43 pm
I went to see former admiral Titley speak on climate change…and while he talked climate change there was no mention of peak oil in his talk…he did mention the artic and how oil companies are ready to start drilling there hoping for the next kuwait…etc…
Calhoun on Wed, 9th Jul 2014 2:59 pm
Rock, another difference between 1972 and today is what we count as oil.
Hiruit Nguyse on Wed, 9th Jul 2014 3:23 pm
Of course, almost 1/3 of this product is tight oil at ~$65.00 Min versus Conventional at ~$10.00 – $20.00. per barrel.
Also the US population has shot up 50% since 1972, so even if we achieved that production level, our per capita oil available will still be only 2/3 of that 1970’s figure.
rockman on Wed, 9th Jul 2014 4:48 pm
H – Which specific “light oils” are selling for $65/bbl? As of 7/8/2014 Sunoco was posting Eagle Ford oil at $99.75/bbl and Eagle Ford condensate at $99/bbl. For comparison they posted WTI at $99.75/bbl. The lowest posted price was $87.85 for Oklahoma Sour. The other 19 posted prices were in the mid to upper $90’s.
Given that the Eagle Ford is one of the premier “tite oils” your “$65” number confuses me a bit. And there’s the fact that the Canadians are paying posted prices plus the cost to ship almost 20 million bbls per year of EFS production to their East coast refineries. They must like the products it yields an awful lot.
And I’m not sure what “per capita oil available” means: domestic? Domestic + imports? Net products consumed?