US may become largest oil producer in 2013

Production growth from shale deposits in North Dakota and elsewhere is boosting US output ahead of Saudi Arabia's and Russia's, BP says. The US should be basically self-sufficient by 2030.

By Charley Blaine Jan 17, 2013 9:09AM
Oil derricks © Comstock/CorbisWill the United States be the top oil producer in 2013?

Yes, according to British oil giant BP (BP). The company's Energy Outlook for 2030 report projects that the U.S. will move past Saudi Arabia and Russia this year in terms of energy liquids production. That's crude oil and biofuels. And the U.S. is likely to hold on to that position for 10 years until 2023.

The reason for the production gains is the emergence of "tight oil," which is how the industry terms what's coming from shale deposits such as the Bakken shale in North Dakota and Montana as well as in Texas and Louisiana.

Moreover, the report says, the United States will become "nearly self-sufficient in energy" by 2030, while India and China will become increasingly dependent on energy imports.

Global energy demand will grow 1.6% a year -- 36% overall by 2030. The global population will grow by 1.3 billion to roughly 8.3 billion. Most of that demand will be met by increased production from the U.S., Canada and Brazil.

The one downside is that people should probably not expect much change in gasoline pump prices.

Crude oil is expected to be the slowest-growing fuel over the next 20 years, but it will be supplemented by biofuels and other liquids.

U.S. oil and gas production has grown rapidly in the past few years because fracking -- the blasting of water and chemicals into rocks deep underground -- has unlocked millions of barrels of crude oil and natural gas. Daily U.S. oil production rose more than 14% in 2012 and is expected to rise an additional 14% in 2013 and 8.2% in 2014.

Thanks to fracking, North Dakota, which produced little oil a decade ago, is now the second-largest-producing state.

The increases in natural gas supplies has pushed prices for the fuel substantially lower.

If the U.S. is going to see sizable energy gains, what about production from the Organization of Petroleum Exporting Countries?

Look for production declines, BP says, because global supplies are so large. In fact, Saudi Arabia, which has the most spare production capacity, cut production back in December. That's been a big reason crude oil in New York rose 9.3% from about $86 a barrel in early December to $95 a barrel as of Thursday.

China has large potential reserves of shale oil and gas, the report said, but it lacks the key factors that have combined to set off the recent energy boom in the western U.S. and Canada: large fleets of drilling rigs, sophisticated financial markets, a favorable fiscal regime and private ownership of reserves.

More on Money Now


85Comments
Jan 17, 2013 11:02AM
avatar
Thank goodness the Greedy Oil Party  will rescue us from President Obama.
Jan 17, 2013 10:59AM
avatar
oil production up and prices not going down.  when are we going to stop getting bent over by oil companies?  we need to do whatever it takes to stop speculation on oil futures and then establish pricing controls on all petroleum products.
Jan 17, 2013 10:56AM
avatar
But...but I thought Obama said just a couple years ago that we had only 2.5% of the world's oil reserves and we consume 25% of it's resources.  Guess he didn't go to that meeting either.
Jan 17, 2013 10:54AM
avatar
if we produce so damn much oil why is our gasoline prices still so high?
Jan 17, 2013 10:47AM
avatar

Yes, indeedy! Try and make sense of any of this oil pricing. The more we produce the more OPEC cuts back and the higher the prices. The less demand the lower the prices until oil producers start cutting back and then causing prices to inflate. It doesn't matter if the U.S. out produces the rest of the world that isn't going to affect our cost at the pump in this life time.

I say let's go back to the camel....We can keep him going on water.

Jan 17, 2013 10:40AM
avatar
No shocker here.  Still blaming the middle east for not running at capacity.  It's cheaper for companies that produce here to sell here than to export anyway.  No change in the pump price with more being produced is just a load of BS as supply and production are rising faster than demand.  That alone should push the cost lower. 
Jan 17, 2013 10:26AM
avatar
Oh My! US tree humpers will have trouble sleeping tonight.
Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The major averages punctuated a solid week with a subdued Friday session. The S&P 500 shed 0.2% to narrow its weekly gain to 1.7%, while the Nasdaq Composite (+0.1%) displayed relative strength. The tech-heavy index finished the week in line with the benchmark average.

Market participants went into today's session expecting to hear some new insight from Fed Chair Janet Yellen, who delivered the keynote address at this year's Jackson Hole Symposium. Unfortunately, the ... More

MSN MONEY'S