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The EIA projects that U.S. oil imports will shrink to essentially zero by 2037 due to prolific production of crude oil. By 2020, the EIA estimates that U.S. oil production could reach 9.6 million barrels per day, the highest rate of production since 1970. The rapid increase in output can be credited to tight oil production, which accounts for 81% of the growth. By 2019, tight oil will make up about half of U.S. oil production.
The EIA mapped out several scenarios using assumptions about how productive America’s oil patch will be. In the most optimistic case – the High Oil and Gas Resource case – the U.S. will no longer need to import oil by 2037. Oil production rises to 13.3 million bpd, and consumption declines enough that the U.S. wouldn’t need foreign oil to meet demand. In this scenario, U.S. oil production would continue to increase over the next two decades and plateau in the 2030s.
On the other hand, it is not inevitable for that scenario to play out. In the EIA’s Reference case as well as its pessimistic the Low Oil case, U.S. oil production peaks before the end of this decade and steadily declines thereafter.
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Still, it is important to note that these are merely projections, subject to much uncertainty. Many of the oil and gas wells produced from shale experience high initial decline rates, and their production rates are highly uncertain. On the other hand, technological progress could bring costs down, making more difficult-to-reach basins accessible. Another reason for uncertainty is that the future estimates are based on current law, and would dramatically change if the U.S. passes legislation to, say, restrict greenhouse gas emissions, or open up more territory to drilling. However, the EIA does believe there is more uncertainty on the upside than there is on the downside.
By James Burgess Of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…