Booming US oil production may be just beginning
A new report says increases in shale output surpass official estimates and will soon make the country No. 1 in the world.
The U.S. is at a historic crossroads when it comes to domestic oil production, which could surpass even some of the most optimistic forecasts.
In testimony this week before the Senate Committee on Energy and Natural Resources, Adam Sieminski, the head of the U.S. Energy Information Administration, reported domestic oil production was at 7.4 million barrels per day as of April -- its highest level since October 1992.
Leonardo Maugeri, a former senior executive at Italian oil giant Eni (ENI), is a fellow at the Belfer Center for Science and International Affairs at Harvard's Kennedy School of Government. Last month he issued a paper on the U.S. oil shale boom after analyzing data from more than 4,000 shale wells and from about 100 oil companies involved in shale oil exploration.
According to his findings, the U.S. may end up producing 5 million barrels of shale oil daily by 2017, becoming the world's largest oil producer as it churns out up to 16 million barrels of oil per day, including shale, conventional, liquefied natural gas and biofuels.
"The nature of shale oil production makes it particularly suited for the United States' industrial, financial, demographic, and geologic landscape," notes a Belfer Center policy brief on Maugeri's paper. "These same characteristics make the expansion of the shale phenomenon to other parts of the world improbable -- at least in the short term."
Indeed, Sieminski noted in his recent testimony that the rate of onshore oil production in the lower 48 states has been remarkable, rising to more than 2 million barrels a day, an increase of 64%, just between February 2010 and February 2013. During that period, Texas more than doubled its oil production, while North Dakota nearly tripled its output.
But Maugeri acknowledges that oil production will always depend on oil prices and that his forecast assumes the price will hold steady or perhaps decrease slightly. "If the oil price drops to below $65 per barrel," the brief says, "production could drop off substantially."
And, whether consciously or not, the brief's comparison of conventional and shale oil production seems to bring up questions about whether this boom in production is just that -- a boom, perhaps to be followed by a bust.
"Conventional oil production requires a high upfront cost, and wells have a long production life" of 30 years, it notes. "Shale oil is quick and relatively cheap to start up and has continual costs and a short production life (1 year). New wells come on line all the time and can be brought off line if the price of oil falls."
Now all we need, is to build more refineries and stop the shipping from the medal east. Let them supply China and the rest of the world.
Greed is the reason we pay so much at the pumps. And get the government to put more regulations on the oil companies. when it comes to pricing.
Highest production level since 1992.
You greedy bastards, at least get the prices back to 1992 level.
SOBs, I am paying $4.50, dont have money to buy food, just feeding the pumps, you SOBs
How about a $20.00 per barrel federal tax on extracted oil & similar products. Because oil is traded on a global market the cost of oil won't increase it will just take money from the oil companies and give it to the government. Oil trades at $100.00 a barrel because of the trouble in the middle east. At 7.4 million barrels a day. $20.00 a barrel would add about $54 billion in revenue for Uncle Sam. Most other oil producing countries do this or something similar.
Part 2. since we are producing so much oil we can start charging the middle east countries a security fee to keep our Military in the region. Perhaps Japan, SO korea & Taiwan should help defray some military costs as well.
Like anything is going to change. The way it is traded and manipulated will continue and big oil and politicians will continue to get rich.
The middle east runs the government so no matter what there will be an excuse why we can't and will not stop importing their oil for the sake of their economy and for the sacrifice of the American economy.
Things will never get better in this sold out country because if it was a factor to the government they would have already addressed the issues.
Oil brought us down and every time things pick up marginally it shoots up again. I guess they expect a different outcome. This country is DOOMED as far as middle class AMERICANS.
Oil is a fungible commodity. It doesn't matter where it comes from or where it is sold. It should be sold at the price that the marketplace demands. What an oil boom in the US does is provide jobs to oil workers and profits to those in the oil production business. It will have very little to do with the price of oil at the pump in the US.
I wish I could convey how upset I get when I read articles like these. We, as a populace, pay at least 25% of our income to Social Security, Medicaid, et, etc. Which is fine, IF, THEY, the corporation along with the government, give us something BACK! How come I feel as though even if we have a ton of Shale Oil, we still won't get anything back as tax-paying citizens?
What does that mean for the average Joe? I have no idea but it can't all be bad.
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[BRIEFING.COM] The stock market ended the Tuesday session on a lower note after generally upbeat earnings took the back seat to geopolitical concerns. The S&P 500 (-0.5%) and Nasdaq Composite (-0.1%) ended on their lows, while the Russell 2000 (+0.3%) displayed relative strength.
Once again, market participants were focused on quarterly reports in the early going, but geopolitical worries overshadowed the impact of mostly better than expected earnings. Specifically, equities ... More
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