The extraction from U.S. shale oil and gas fields is expected to continue increasing in the upcoming years, but will fall in the short-term, according to a report published on Monday by the Energy Information Administration (EIA).
The EIA estimates shale oil production will drop to 4.2 million barrels per day (bpd) by the end of 2017 after having reached a peak of 4.9 million bpd in 2015.
The decline is "mainly attributed to low oil prices and the resulting cuts in investment" but went on to say that, "production declines will continue to be mitigated by reductions in cost and improvements in drilling techniques."
Beyond 2017, the EIA believes that by 2040, shale oil production will increase 45 percent compared to 2015, reaching 7.1 million bpd. The growth will parallel with an expected increase of U.S. natural gas production from shale to 79 billion cubic feet a day by 2040. This represents more than double output compared to 2015 with the added bonus of no drop off in production in the short-term.
The EIA highlighted two Appalachian shale gas plays, Marcellus and Utica, for containing factors favorable for production: shallower geologic formation depths and proximity to consuming markets. Thus, both sites are expected to provide just over half of U.S. total shale gas production by 2040.
Additionally, the EIA estimates the Bakken formation located in North Dakota and Montana will be the country's largest oil field by 2019, and will produce almost a third of the nation's shale oil output by 2040.
The report nevertheless warned that fluctuations in oil prices could cause wild production swings by 2040 from 3 million bpd in a bullish market to 12 million bpd if prices are high.
By Erwin Cifuentes for Oilprice.com
More Top Reads From Oilprice.com:
Erwin Cifuentes is a Contributing Editor for Southern Pulse Info where he focuses on politics, economics and security issues in Latin America and the Caribbean.… More