• 23 mins WTI At 7-Month High On Supply Optimism, Kurdistan Referendum
  • 7 hours Permian Still Holds 60-70 Billion Barrels Of Recoverable Oil
  • 12 hours Petrobras Creditors Agree To $6.22 Billion Debt Swap
  • 16 hours Cracks Emerge In OPEC-Russia Oil Output Cut Pact
  • 20 hours Iran Calls On OPEC To Sway Libya, Nigeria To Join Cut
  • 21 hours Chevron To Invest $4B In Permian Production
  • 23 hours U.S.-Backed Forces Retake Syrian Conoco Gas Plant From ISIS
  • 1 day Iraq Says Shell May Not Quit Majnoon Oilfield
  • 3 days Nigerian Oil Output Below 1.8 Million BPD Quota
  • 4 days Colorado Landfills Contain Radioactive Substances From Oil Sector
  • 4 days Phillips 66 Partners To Buy Phillips 66 Assets In $2.4B Deal
  • 4 days Japan Court Slams Tepco With Fukushima Damages Bill
  • 4 days Oil Spills From Pipeline After Syria Army Retakes Oil Field From ISIS
  • 4 days Total Joins Chevron In Gulf Of Mexico Development
  • 4 days Goldman Chief Urges Riyadh To Get Vision 2030 Going
  • 4 days OPEC Talks End Without Recommendation On Output Cut Extension
  • 4 days Jamaican Refinery Expansion Stalls Due To Venezuela’s Financial Woes
  • 4 days India In Talks to Acquire 20 Percent Of UAE Oilfield
  • 5 days The Real Cause Of Peak Gasoline Demand
  • 5 days Hundreds Of Vertical Oil Wells Damaged By Horizontal Fracking
  • 5 days Oil Exempt In Fresh Sanctions On North Korea
  • 5 days Sudan, South Sudan Sign Deal To Boost Oil Output
  • 5 days Peruvian Villagers Shut Down 50 Oil Wells In Protest
  • 5 days Bay Area Sues Big Oil For Billions
  • 5 days Lukoil Looks To Sell Italian Refinery As Crimea Sanctions Intensify
  • 5 days Kurdistan’s Biggest Source Of Oil Funds
  • 6 days Oil Prices On Track For Largest Q3 Gain Since 2004
  • 6 days Reliance Plans To Boost Capacity Of World’s Biggest Oil Refinery
  • 6 days Saudi Aramco May Unveil Financials In Early 2018
  • 6 days Has The EIA Been Overestimating Oil Production?
  • 6 days Taiwan Cuts Off Fossil Fuels To North Korea
  • 6 days Clash In Oil-Rich South Sudan Region Kills At Least 25
  • 6 days Lebanon Passes Oil Taxation Law Ahead Of First Licensing Auction
  • 7 days India’s Oil Majors To Lift Borrowing To Cover Dividends, Capex
  • 7 days Gulf Keystone Plans Further Oil Output Increase In Kurdistan
  • 7 days Venezuela’s Crisis Deepens As Hurricane Approaches
  • 7 days Tension Rises In Oil-Rich Kurdistan
  • 7 days Petrobras To Issue $2B New Bonds, Exchange Shorter-Term Debt
  • 7 days Kuwait Faces New Oil Leak Near Ras al-Zour
  • 8 days Sonatrach Aims To Reform Algiers Energy Laws
Colin Chilcoat

Colin Chilcoat

Colin Chilcoat is a specialist in Eurasian energy affairs and political institutions currently living and working in Chicago. A complete collection of his work can…

More Info

As U.S. Reserves Grow, So Does Geopolitical Weight

As U.S. Reserves Grow, So Does Geopolitical Weight

The peak will have to wait – at least in the United States. According to a new report from the Energy Information Administration (EIA) US proved reserves of both crude oil and natural gas are on the rise. The growth – roughly 10 percent for each – is yet another affirmation of shale’s staying power and adds weight to an increasingly heavy diplomatic stick. 

US Reserves 1973 - 2013

Source: EIA

In 2013, proved reserves of crude oil and lease condensate increased 3.1 billion barrels (bbl), exceeding 36 bbl for the first time since 1975. Natural gas proved reserves are higher than ever before and 2013’s increase of 31 trillion cubic feet (Tcf) brought the US total to 354 Tcf. North Dakota was responsible for about 61 percent of the net increase in oil while natural gas gains were spread more evenly across Texas, Pennsylvania, Wyoming, Oklahoma, and Colorado. New discoveries were minimal and extensions to existing tight oil and shale gas plays were largely responsible for the rising figures.

Related: Global Drilling Slowdown On The Way

Reserve growth was accompanied by a similar boost to production. Total crude oil and lease condensate production in 2013 increased 14 percent from 2012 levels to 2.7 bbl – the country’s fifth annual production increase. Natural gas production growth was more ordinary at 1.4 percent, but 26.5 Tcf represents a new high-mark as well as the eighth consecutive year that production rose. Imports for both crude oil and natural gas were down 10 and 8 percent respectively.

Before continuing, it is important to note that 2015, and it’s presumed lower prices, may not be so kind to future proved reserves which indicate the resources that are recoverable under existing economic and operational conditions. Still, the EIA report and outlooks from the International Energy Agency dispel the notion that shale gas and tight oil producers cannot operate under the current market conditions.

US Crude oil and Liquid Fuels Production

Source: EIA

US crude oil production is expected to add 800,000 barrels per day (bpd) in 2015, and that number could soar as high as 1.5 million bpd. Shale oil is steadily moving down the cost curve and since 2012 breakevens have dropped by up to $30 per barrel. The Bakken and Eagle Ford plays – which accounted for almost 95 percent of the proved reserve growth in 2013 – can sustain oil prices as low as $50 per barrel. One estimate places the national average breakeven point at $73 per barrel, well below the EIA’s price projections for 2015. Natural gas production will also see a bump next year, and even with relatively low prices the US becomes a net exporter of natural gas in 2018.

Related: The Oil Glut And An Inevtiable Oil Price Rebound

US production and reserve growth are altering its trade relationships and throwing more influence behind its geopolitical agenda. The change is most evident in Russia, who, less than a decade ago, was seen by the US as a growing market. Now, the country’s leverage in Europe is at an all-time low and little anticipated competition on the Asian market looms. Toward 2040, China, India, and other developing economies in Asia will account for 72 percent of the net world increase in liquid fuel consumption. With demand flat or falling in most OECD member states, nations will look to flex their political muscle across Asia.

While better positioned than some, the US still has room to grow – ideally through subtraction, by eliminating as many barriers to cooperation as possible. The case for oil exports takes on greater urgency as prices dip and competing sources limit the window of opportunity. The psychological impact of American oil overseas is worth weighing as much, if not more than the economic benefits.

By Colin Chilcoat of Oilprice.com

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Leon Holcomb on February 23 2016 said:
    I don't understand world economics. But, I wish the U.S. would settle on a price for American gas that Americans could live with and then sell only American gas to the public. Then tell the OPEC nations to take their oil and stick it up their ass!

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News