The EIA has published its latest long-term energy forecasts, and believes US domestic crude oil production will keep rising to 2035 – in contrast to what most other forecasters are saying.
In the near term the main reason is offshore deepwater drilling, and continued development of existing fields. The timing, while US officials and lawmakers mull over the causes — and possible effects — of the fatal Deepwater Horizon accident and continuing oil leak, is more than a little ironic.
Moreover, the agency’s outlook is in contrast to just about every other major energy forecaster, from the OECD’s International Energy Agency (see image on the right) to consultancy IHS Global Insight, who all see US oil production declining.
In contrast the EIA forecasts, under its ‘reference case’ scenario, that US crude oil production will follow a fairly steady trajectory from 4.96 b/d in 2008 to 6.27m b/d in 2035.
But the organisation acknowledges the stark difference between its forecasts and everyone else’s:
A major difference between the AEO2010 Reference case and all but the EVA projection is that the AEO2010 projects much higher domestic crude oil production throughout the projection (Table 14). In addition, domestic production of crude oil increases gradually over time in the AEO2010 projection, whereas all the other projections show rapid decreases in domestic production. As a consequence, the AEO2010 Reference case shows lower net imports of crude oil.
The detailed comparisons are contained in this table (click for bigger version):
This is how the EIA explains it:
Total U.S. crude production increases from 2008 to 2035, as rising world oil prices spur both onshore and offshore drilling. In the short term, a vast majority of the increase comes from deepwater offshore fields. Fields that started producing in 2009 or are expected to start in the next few years include Great White, Norman, Tahiti, Gomez, Cascade, and Chinook. All are in water deeper than 800 meters, and most are in the Central Gulf of Mexico.
Of itself, that’s not such a radical concept. What is different is the EIA’s confidence that new deepwater GoM production will more than compensate for other declines. In the longer term, it appears the EIA is also far more confident about new discoveries and increased production from existing ones:
… production from the continued development of other recent discoveries, as well as new discoveries, offsets production declines in older fields resulting in an increase in production
Note that the EIA doesn’t take into account possible changes in policy; it aims to provide information for policymakers on what the energy outlook would be without policy changes.
Those volatile oil prices – and far less volatile consumption - FT Energy Source