Shale Oil Reserves Could Soon Make US Top Oil Producer
In less than half a decade, the United States could become the top oil producing country in the world, thanks to the rise in the production of shale oil in the country, a Harvard Kennedy School Belfer Center researcher said in a policy brief.
There is huge potential in U.S. shale oil production, the researcher, Leonardo Maugeri – a former manager at Italian oil and gas giant Eni S.p.A. – said, with the largest U.S. shale formations capable of sustaining a total of more than 100,000 producing wells, compared with about 10,000 actual producing wells in the country today.
Horizontal drilling and hydraulic fracking are the keys to unlocking that potential, Maugeri said, and the United States has a significant advantage over every other country in the availability of horizontal drilling. About 95 percent of drilling rigs in the country can perform horizontal drilling, making it unrivalled in drilling potential.
The United States is taking advantage of that potential. Technically recoverable shale oil is estimated to represent about 10 percent of the world’s crude oil resources, according to a study sponsored by the Energy Information Administration (EIA). In 2012, the United States was significantly higher at 29 percent.
The United States also has an advantage over most other countries in the amount of technically recoverable shale oil resources it has. The EIA assessed 41 countries outside the U.S., and Russia, with 75 billion barrels, had the greatest number. The United States was second on the list with 58 billion barrels – up from estimates of 48 billion barrels elsewhere. China finished at number three with 32 billion barrels, the study showed.
However, to realize this potential, a significant increase in drilling intensity will be required. This is in part because of the large decline in shale oil well production after the first few months of activity. Compared with conventional wells that have a long production life of about 30 years, shale oil wells have a short production life of about one year. That means that as many new wells as possible will have to be brought online. Maugeri believes that the producing lifespan of the shale formations could be pushed out to well beyond 2030 on improvements in geology and drilling technology.
U.S. drilling technology could allow U.S. shale oil production to reach 5 million barrels of oil per day by 2017, Maugeri said, with most – about 90 percent – of the output coming from Bakken-Three Forks in North Dakota, and Eagle Ford and the Permian Basin in Texas. If the United States reaches that level of shale oil production, it will likely become the largest global oil producer.
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