U.S. climbs to the top of the heap as the world’s largest oil producer.
The United States will be the world’s largest oil producer this year. There’s been so much talk about opening up new lands and waters to oil exploration, and such a push for our energy independence, and now we’re the world’s largest producer.
Most people would have been skeptical just a handful of years ago if anyone had suggested this is where we’d be today. Yet here we are. U.S. total supply for 2013 is expected to average 12.1 millions barrels per day, according to PIRA Energy Group. In 2012, the U.S. became the second largest supplier of oil, ahead of Russia and just behind Saudi Arabia. Both the U.S. and Saudi Arabia increased their supply in 2013, but U.S. production grew at a faster pace. China, Canada, United Arab Emirates, Iran, Iraq, Kuwait and Mexico round out the top 10 producers.
Just a few years ago, in December 2010, The Oil Drum predicted a downward trend in U.S. oil production to continue. The article, World Oil Production - Looking for Clues as to What may be Ahead, noted that U.S. oil production had been falling since 1970, aside from an upward “bump” from Alaskan oil from 1984 to 1986, and would likely continue to do so. The outlook also cited increased deepwater oil production and increased production from the Bakken as reasons for another small uptick, but attributed it mainly to deepwater drilling and predicted that growth would have to be maintained to continue the higher level of production for a few more years.
With the growth in Bakken shale oil production in the last three years, this story looks comically shortsighted. The U.S. has become the world leader primarily because of the growth in shale oil production. Shale crude and condensate production is now slightly over one-third of total U.S. crude production, and shale natural gas liquids are now almost half of total NGLs.
Total U.S. supply growth for 2013 is on par with 2012 at approximately 1 million barrels per day. Its growth rate is greater than the sum of the growth of the next nine fastest growing countries combined and has covered most of the world’s net demand growth over the past two years.
It looks as though the U.S. will maintain the position of top producer for the foreseeable future. Although growth rates of U.S. shale liquids are expected to slow, PIRA’s forecast shows the U.S. increasing its lead over the next two largest producers through this decade and retaining that lead through the next.
Regardless of what this level of production means to our energy independence, it has significant meaning for oilfield service providers. There will be plenty of work over the coming decades, and the best contractors will have every opportunity to succeed.
Shale oil production has boomed in several areas across the U.S., but the Bakken has really fueled the overall growth in the past few years. It’s been a financial windfall for North Dakota. The whole region – and all the companies that do business there – is sharing in the economic gains. The opportunity is there. Here’s hoping you can take advantage.
Enjoy this month’s issue.