Oil production in the U.S. rose by four million bpd in the five years preceding 2015. While production slowed down the following year, it rose again in 2017. The surge is directly attributable to advancements seen in U.S. shale production abilities.
While most industry observers never imagined that U.S. oil production would ever overshadow the levels seen a half-century ago, it’s a foregone conclusion now. The question that interests observers today, however, is this: how far will output rise before the inevitable happens, and declines begin? Will the surge rise another two or three million bpd before declining?
According to the EIA’s Annual Energy Outlook
The Annual Energy Outlook report by the EIA has been trying to answer this well-debated question by drawing on several models that describe the way oil production might shape up over the next couple of decades.
The middle-of the-road model predicts that extraction technologies will continue to evolve at the rate currently seen. Production will rise to keep up with rising population trends. Technology will help compensate for resources that become harder to extract over time, and will deliver drops in costs. Oil production is expected to rise by three million bpd over the next three years before stabilizing at sustainable levels that the last to the end of the year 2050.
There are other scenarios possible, as well
A low resource scenario projects rises in production by one million bpd through the next decade, and a decline past that point. The high oil resource scenario, on the other hand, sees a rise of two or three million bpd in the beginning, and a lower level of growth over the next few decades. This scenario sees a doubling of production over current levels by 2050.
The Annual Energy Outlook report, however, neglects to take one complication into account — the inability of infrastructure to keep up with demand. Increases in production require a number of infrastructure improvements. From crude oil pipelines to ways to capture and use the natural gas that is a byproduct of drilling, infrastructure hasn’t been keeping up. When there is no way to capture the gas, there is only so much that drillers can legally flare. Even today, drillers do cut back on production to comply with flaring limits.
According to Sigma Drilling Technologies, the pulsation dampener manufacturer and designer of pulsation control equipment, bottlenecks such as unavailability of spares or oilfield services, pose real limits to pushing through increases in drilling capacity. But private enterprise can do away with these limits. They only need to focus their energies on the simple goals of preparedness and improvements in efficiency.
