Monday, November 4, 2013

EIA Data Suggests US Shale Oil Production Peaks In 2015 Without Major New Investment

Tom Whipple of, using EIA data, has a solid analysis of US shale oil production, suggesting it will peak by 2015, without an investment surge in drilling rigs. Here is the link:

Oil production in the US has jumped by 2.5 million barrels per day since 2007 and is still growing. But Oil Price's analysis shows that the growth is slowing. Currently, the net increase from new oil wells drilled minus decline from existing oil wells in the Bakken and Eagle Ford oil shales is 50,000 barrels per day. That net increase, however, is likely to go to zero by 2015.  There is, however, one caveat.

The trend toward no further growth in oil production by 2015 would continue, unless investment in more drilling rigs happens. Is that likely to happen?

The price of oil globally will likely determine whether more capital flows into shale oil production. It is widely accepted that shale oil production in the US requires a market price of $80 per barrel. Recent declines in oil prices, if they continue, would make more investment in shale oil drilling less likely.

And so, current facts suggest that the growth in US oil production will stop around 2015. Yet, current facts may not be future facts. A significant degree of uncertainty exists.

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