by Nicholas SakelarisStaff Writer- Dallas Business Journal
Domestic shale oil production could shoot up to 5 million barrels per day by 2017, making the United States the top oil producing country in the world, according to a researcher at Harvard Kennedy School. And, it’s not hard to predict, Texas’ oil plays lead the way. Last week, I reported how Texas already ranks 15th in the world among oil producing countries. Yes, countries. Leonardo Maugeri, a former oil industry executive from Italy, estimates there could be more than 100,000 working wells in North Dakota and Texas by 2030. There are about 10,000 now.
Nationwide, production of all oil could shoot up from 11.3 million to 16 million barrels per day by 2017.
That’s much higher than the best scenario projected by the Energy Information Administration, which showed 10 million barrels per day between 2020 and 2040. The EIA reported production of all crude oil has already gone up from 5 million barrels per day in 2008 to 6.5 million barrels per day in 2012. For some perspective on just how proficient domestic drilling has become, Maugeri points out that the U.S. completed 45,468 oil and gas wells and put 28,354 of them into production. The rest of the world drilled 3,921 wells. The report also notes that drillers are punching 90 new wells a month into the Bakken Shale to maintain production of 770,000 barrels per day. Shale wells reach peak production shortly after being brought online and decline from there.
“No other country or area of the world has even a fraction of this drilling capacity and building up this power would require several years,” Maugeri wrote in the policy brief. “The combination of vast geologic supply of shale oil and low population density in these areas allows for intense, sustained production unique to the United States.”
So, what does this mean for the Middle East and the Organization of Petroleum Exporting Countries?
According to the Maugeri, the U.S. will still need to import oil and when the price drops, the cheapest oil will come from the Middle East. The EIA estimates oil imports will drop to 34 percent by 2019. He also notes that North African countries such as Nigeria, Angola, Libya and Algeria will have to find other buyers. Oil executives stand strong on their belief that OPEC can’t stop the U.S. shale boom.
Maugeri is a Roy Family Fellow in the Belfer Center’s Environment and Natural Resources Program and works with the Geopolitics of Energy Project. Nicholas covers the energy and banking beats for the Dallas Business Journal.