The Energy Information Administration (EIA) has just released its latest report card, and the future looks bright for the oil business. The EIA reports that with improving technology and increasing productivity, the United States could become oil-independent by 2037.
The EIA projects that U.S. production could reach 13 million barrels per day in the next 23 years, meaning we would no longer need to rely on foreign imports.
In 2006, those imports reached an all-time high of about 13 million barrels per day. Since horizontal drilling and hydraulic fracturing – “fracking” – have allowed producers to extract oil from shale, that volume has dropped to about 5 million barrels per day.
Of the many producers spread across the country, six regions account for 90% of domestic oil production growth:
- Eagle Ford (Southern Texas) – 1.2 million barrels per day
- Bakken (North Dakota and Montana) – 1 million barrels per day
- Niobrara (Wyoming, Colorado, South Dakota and Nebraska) – 290,000 barrels per day
- Marcellus (northern Appalachian Basin) – 50,000 barrels per day
- Haynesville (Arkansas, Louisiana and Texas) – 60,000 barrels per day
- Permian (Western Texas) – 1.3 million barrels per day
How Oil Independence Will Change the U.S.
Being able to supply all our own oil will be beneficial on many levels:
No more vulnerability. Events such as political unrest that are more common in other countries would not have the same opportunity to disrupt supply or pricing here at home.
More stable prices. A steady domestic supply will make market conditions less volatile – and make budgeting and expenses more manageable for businesses and the average consumer.
Boosted Manufacturing. Thanks to lower energy rates, U.S. firms are starting to bring production back to their home turf; hundreds of millions of dollars are being invested in resurrecting old plants and building new ones, and billions of dollars in chemical industry projects have launched in the past 3 years.
More job creation. With this increase in manufacturing comes new jobs. Price Waterhouse Cooper estimates as many as 1 million new jobs in the manufacturing sector could be generated by 2025, raising further economic growth.
More foreign investment. Offshore companies are attracting new business as they look to take advantage of more affordable energy costs.
While this is all good news for us, it’s not so good for those countries currently exporting oil to the US. The economies of many South American, Middle Eastern and African countries are particularly dependent upon oil exports.
In Ecuador, oil exports account for about $6.5 billion, or 8%, of GDP. Canada would also feel the loss, having exported 1.14 billion barrels to the U.S. in 2013. With the largest importer out of the game, prices everywhere should remain much more stable.
As abundant as shale oil is at this time, we can’t overlook the fact that its supply is finite. If we’re to sustain energy independence once it’s achieved, we’ll need to put much more effort into developing renewable resources.
In the meantime, while market conditions continue to change, being able to depend on your fuel distributor to get you through those changes will remain the same. They’re in the business of people – and with a team of professionals who will proactively anticipate your company’s needs, your future will look bright, too.