The United States will become a net oil and oil product exporter this year thanks to continued growth in production combined with slacker domestic demand, the Energy Information Administration said in its 2020 Annual Energy Outlook.
Oil production, the EIA said, will continue growing until at least 2025, reaching 14 million bpd in just two years, after which it would plateau and stay flat until about 2045. This, however, depends on the developing shale oil deposits with little history of production, the EIA noted, meaning there scant background information about production rates and how long they can be sustained.
One thing that is known, however, is that over time, producers will need to move to less productive areas of the shale patch as the most productive ones get exhausted. This will slow down the growth rate in overall production.
Consumption of oil in the U.S., on the other hand, will decline over the next years and decades. Peak consumption, according to the authority, was hit in the early 2004 and since then demand has been steadily declining.
Unsurprisingly, shale oil will account for the bulk of production in the U.S., with the Gulf of Mexico, Alaska, and other conventional resources making up less than half of the total in the period to 2050. In fact, in the EIA’s reference case, conventional oil will account for only 30 percent of the total.
Even so, offshore production could hit a record-high 2.4 million bpd by 2026 thanks to new discoveries, the EIA also said. Many of these, the authority noted, were discovered before the 2014 price collapse, but development had to be delayed until prices improved. Now, they may have risen high enough to make these projects economically viable.
Offshore production will continue rising longer than shale oil production, with the peak seen in 2035 and the decline beginning around 2050.
By Irina Slav for Oilprice.com
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