|
EIA projects $102 Brent crude average Agency says US crude production could reach 10 million bpd by 2040 under one assumption, including undiscovered Alaska resources Kristen Nelson Petroleum News
The U.S. Department of Energy’s Energy Information Administration expects U.S. crude oil production to rise from an average of 6.5 million barrels per day in 2012 to 7.3 million bpd this year and to 8.1 million bpd in 2014, the agency said in its June Short-Term Energy Outlook.
But EIA said in a separate June 14 release that projected output from 6-8 million bpd over the next 30 years under its reference case projection could grow to a sustained higher level of 10 million bpd between 2020 and 2040. Under this resource scenario, total domestic fuels production — including crude oil, natural gas liquids, refinery gains, biofuels and other liquid fuels — would increase to more than 18 million bpd in 2040, compared to 12 million bpd in the agency’s reference case. Under this increase in domestic supply the net import share would drop from some 37 percent in the reference case to roughly 7 percent in 2040 in the high oil and gas resource case.
The high oil and gas resource case which is the basis of the 10 million bpd projection is based on “a scenario in which U.S. crude oil production continues to expand after 2020, driven primarily by tight oil production,” EIA said. “This increased production results from assumed greater technically recoverable tight oil resources, as well as undiscovered resources in Alaska and the offshore Lower 48 states.” The Alaska increase reflects “the possibility that there may be more crude oil on the North Slope, including tight oil,” but does not reflect opening the Arctic National Wildlife Refuge to exploration or production, the agency said in its 2013 annual outlook.
The high oil and gas resource case also includes an increase in gas to liquids and development of kerogen or oil shale. Natural gas liquids production would increase from 2.2 million bpd in 2011 to 5 million bpd in 2040, compared to less than 3 million bpd in the reference case in 2040, with GTL production reaching 600,000 bpd in 2040 compared to 200,000 bpd in the reference case.
EIA said the tight oil resources are increased in the high oil and gas resource case by changing the estimated ultimate recovery per well and assuming closer well spacing.
Current production increase In the June outlook, EIA said North America accounts for much of the projected growth in supply from non-OPEC, Organization of the Petroleum Exporting Countries, with continued growth from tight oil formations.
“North America accounts for most of the expected growth in non-OPEC crude oil production over the next two years because of continued higher output from U.S. tight oil formations in North Dakota and Texas and from Canadian oil sands,” EIA Administrator Adam Sieminski said in a statement. “This supply boost will contribute to lower crude oil spot prices this year and next year, compared with 2012 levels.”
EIA said one current driver of production growth through 2014 is continued exploration success in some of the major plays in the Permian basin, with operators in the Bone Spring, Spraberry and Wolfcamp plays having “great success in finding sweet spots and hydraulically fracturing horizontal wells.”
The agency said it expects improvements in drilling and completing horizontal wells from Permian basin multiwell pads, giving operators more access to resources in stacked plays from single surface locations.
Gulf of Mexico production estimates have been revised downward from the May forecast, with maintenance at the BP natural gas processing plant in Pascagoula, Miss., and on the NaKika offshore platform lowering production in May and early June. EIA said there would be additional shut-in production as Shell installs a new platform as part of the Mars B project.
U.S. liquid fuel net imports, which peaked at 12.5 million bpd in 2005, were down to 7.4 million bpd in 2012 and EIA said it expects net imports to continue to decline to an average of 5.7 million bpd in 2014.
“Similarly, the share of total U.S. consumption met by liquid fuel net imports peaked at more than 60 percent in 2005 and fell to an average of 40 percent in 2012,” with the net import share expected to fall to 30 percent next year, the lowest level since 1985, EIA said.
Henry Hub at $4.04
Natural gas prices averaged $4.04 per million British thermal units at the Henry Hub in May, down 13 cents from the April average, EIA said, and the Henry Hub price is expected to increase from an average of $2.75 per million Btu last year to $3.92 this year, and $4.10 in 2014.
Domestic natural gas marketed production is projected to increase from 69.2 billion cubic feet per day in 2012 to 70 bcf per day this year, and to 70.4 bcf in 2014, the agency said, with onshore production increasing over the forecast period and federal Gulf of Mexico production declining.
| 