hrsjobs(at)hireresourcestaffing(dot)com 281.295.5737

US oil production to test record high in 2016

The Energy Information Administration, a statistical arm of the US Department of Energy informed that the US oil production will reach his historical peak by 2016, raising its forecast to levels that would have been unexpected just a few years ago.

The U.S. oil and gas industry has been a bright spot in recent years as the economy struggles to recover from a financial crisis and growth stagnation.

The energy renaissance has prompted some large U.S. oil companies to sell foreign assets and come home to focus on shale, leading to an upsurge of infrastructure projects.

The EIA said in 2016, domestic production of crude oil will account for 63% of total supplies, a significant increase from 2011 when it almost covered 38% of the country’s needs.

Photo source:

High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. See our Ts&Cs and Copyright Policy for more detail. Email to buy additional rights.

A year ago, the EIA was predicting US crude production of about 7.5m b/d in the second half of this decade, a level that has already been surpassed this year. It has now revised sharply higher its estimates of future output in its central “reference case”, which assumes that current laws and regulations remain generally unchanged.

The shale boom is already reshaping global energy markets, pushing the US behind China as the world’s largest net oil importer, and putting pressure on the members of Opec, the oil-producing countries’ cartel. It is also giving the US additional global influence.

The EIA now predicts that US crude output will begin to tail off slowly after 2020, but says there is still great uncertainty over the outlook. Adam Sieminski, the administrator of the EIA, said factors influencing the outlook for production would include future discoveries about the geology of US shale oilfields, regulatory requirements imposed on producers and investment in new pipelines.

Sustaining the surge in US oil production will require prices that are high by the standards of a decade ago. Mr Sieminski said US shale production would be profitable at prices above $90 a barrel, and possible at above $80-$85 a barrel.

However, he added, there were many other oil-producing countries that required relatively high prices to sustain their economies and government spending, “and those numbers are probably higher than the marginal cost of shale production in the US”.

For natural gas, meanwhile, the EIA is predicting continued indefinite growth in production. Gas is easier to produce than oil from shale and other “tight” rocks, and by 2040 the EIA expects US production to be 56 per cent higher than in 2012.

Among the markets for that new production will be electricity generation, with gas overtaking coal as a fuel for power plants in 2030, and exports, with pipeline sales to Mexico taking the largest volumes, but also shipments of liquefied natural gas around the world.

At the report’s launch, Mr Sieminski refused to take a view on the debate over the relaxation of US export restraints that bar almost all crude oil sales overseas, with the exception of some shipments to Canada for refining and resale back into the US.

However, he pointed out that as US production rose, it was resulting in higher exports of refined products such as diesel, which are not subject to restrictions, and the US refining industry had limited capacity.

If US oil product exports were to continue to increase at the rate of the past two years, he said, then substantial new refining capacity would have to be built.

Croocks, Ed. US oil production to test record high in 2016. FT. Retrieved from


    Your Turn To Talk

    Your email address will not be published.