Future U.S. parsimonious oil and shale gas prolongation depends on resources, technology, markets

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Based on projections in a U.S. Energy Information Administration’s Annual Energy Outlook 2016 (AEO2016), U.S. parsimonious oil prolongation is approaching to strech 7.08 million barrels per day (b/d), and shale gas prolongation is approaching to strech 79 billion cubic feet per day (Bcf/d) in 2040. These values simulate Reference box projections, while several side cases with conflicting assumptions of oil prices, technological advances, and apparatus accessibility have conflicting levels of parsimonious oil and shale gas production.

Image credit: U.S. Energy Information Administration

Image credit: U.S. Energy Information Administration

U.S. prolongation of parsimonious oil and shale gas has augmenting significantly from 2010 to 2015, driven by technological improvements that have reduced drilling costs and softened drilling potency in vital shale plays, such as a Bakken, Marcellus, and Eagle Ford.

Production from parsimonious oil in 2015 was 4.89 million barrels per day, or 52% of sum U.S. wanton oil production. From 2015 to 2017, parsimonious oil prolongation is projected to diminution by 700,000 barrels per day in a Reference case, especially attributed to low oil prices and a ensuing cuts in investment. However, prolongation declines will continue to be mitigated by reductions in cost and improvements in drilling techniques. The use of some-more fit hydraulic fracturing techniques and a focus of multiwell-pad drilling, as good as changes in good execution designs, will concede producers to redeem larger volumes from a singular well.

As oil prices recover, oil prolongation from parsimonious formations is approaching to increase. By 2019, Bakken oil prolongation is projected to strech 1.3 million b/d, leading a Eagle Ford to turn a largest parsimonious oil-producing arrangement in a United States. The Bakken, that spans 37,000 block miles in North Dakota and Montana, has a technically recoverable apparatus of 23 billion barrels of parsimonious oil that can be constructed formed on stream technology, attention practice, and geologic knowledge. Bakken prolongation is projected to strech 2.3 million barrels per day by 2040, roughly a third of a projected U.S. sum parsimonious oil production.

Image credit: U.S. Energy Information Administration

Image credit: U.S. Energy Information Administration

Image credit: U.S. Energy Information Administration

Image credit: U.S. Energy Information Administration

Natural gas prolongation from shale gas plays in 2015 accounted for 37.4 billion cubic feet per day (Bcf/d), or 50% of sum U.S. healthy gas production. Unlike prolongation from parsimonious oil, that declines in a nearby tenure before augmenting after in a foresee period, healthy gas prolongation from shale gas plays is approaching to boost by 2040 in a AEO2016 Reference case.

The dual Appalachian shale gas plays, a Marcellus and Utica, have factors auspicious for production: shallower geologic arrangement inlet and vicinity to immoderate markets. Both Appalachian shale gas plays have remained volatile to a low healthy gas prices and are projected to continue to expostulate sum U.S. prolongation in a prolonged term. Shale gas prolongation in these plays is approaching to strech some-more than 40 Bcf/d by 2040, providing only over half of U.S. sum shale gas production.

Two oil cost side cases illustrate a outcome of aloft or revoke tellurian wanton oil prices on prolongation from parsimonious formations. By 2040, a tellurian benchmark Brent wanton oil mark cost averages $73/b in a Low Oil Price case, $136/b in a Reference case, and $230/b in a High Oil Price case. In a High Oil Price case, drilling activities boost parsimonious oil prolongation by 2026, after that it starts to decline. The conflicting is loyal in a Low Oil Price case, where parsimonious oil prolongation declines somewhat before augmenting after 2026. Production of shale gas increases in both a High and Low Oil Price cases.

In a apparatus and record side cases, a estimated ultimate liberation for shale gas and parsimonious oil wells in a United States is 50% aloft or 50% revoke than in a Reference case. Rates of technological alleviation that revoke costs and boost capability in a United States are also 50% aloft or 50% revoke than in a Reference case. By 2040, these cases outcome in a larger differences from Reference box prolongation values than do a choice oil cost cases.

Source: EIA