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.
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.
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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.
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