EIA: U.S. Oil Production to Rise 20% by 2020

U.S. oil production is expected to rise by a fifth over the next decade as a boom in shale oil production helps cut the country’s dependence on foreign oil imports, the Energy Information Administration said Monday.

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U.S. crude oil production is projected to reach 6.7 million barrels per day in 2020, the EIA said in its annual domestic energy outlook. Growing shale production, as well as development in the Gulf of Mexico, is expected to push overall production up 20 percent in the next decade, 11 percent higher than the EIA’s previous forecast.

Shale oil production made up 21 percent of output in the lower 48 states in 2010, but thanks to advances in drilling techniques, such production is expected to account for 31 percent of output by 2035. Though production in the U.S. is expected to slow after 2020, output will remain above 6.1 million bpd through 2035, the EIA said.

Imports are expected to drop to 36 percent of consumption by 2035, down from 49 percent in 2010, as domestic production rises and high fuel efficiency standards cut into demand, according to the EIA report, which does not factor in the newest proposed efficiency standards for vehicles from 2017 to 2025 that it says could reduce demand even further.

EIA head Howard Grunspecht said the surge in shale oil production will not be much affected by the Obama administration’s rejection of TransCanada’s Keystone XL pipeline. Drillers had hoped the project would help move oil produced from shale resources.

“Given the prices projected in the report, we don’t think that production is dependent any particular pipeline,” Gruenspecht said at an event unveiling the report.

However, despite lowering its estimate for unproved technically recoverable shale gas in the U.S. from last year’s estimated 827 trillion cubit feet down to 482 tcf, the EIA still estimates that the U.S. will produce 7 percent more natural gas between 2010 and 2035 than previous projected. U.S. natural gas output is projected to hit 27.9 tcf in 2035. Strong natural gas output will fuel exports, said the EIA.

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