Harvard has a new US Shale Oil Study forecasts US as world number one oil producer with 16 million barrels per day of all liquid oil in 2017

In a paper titled “The Shale Oil Boom: A U.S. Phenomenon,” [64 pages] Maugeri wrote that the unique characteristics of shale oil production are ideal for the United States — and unlikely to be mirrored elsewhere in the world. These factors include the availability of drilling rigs, and the entrepreneurial nature of the American exploration and production industry, both critical for the thousands of wells required for shale oil exploitation.

Maugeri, author of a 2012 report forecasting rapid growth of global oil production and belying the notion that oil output has “peaked,” argues in his new paper that the boom in U.S. shale oil production is central to the overall U.S. oil surge. If oil prices remain close to today’s levels, total U.S. production of all forms of oil [all liquids includes natural gas liquids and ethanol] could grow from 11.3 million barrels per day to 16 million barrels per day by 2017.

The dramatic surge in U.S. shale oil production could more than triple the current American output of shale oil to five million barrels a day by 2017, which would likely make the United States the No. 1 oil producer in the world, according to the new study by researcher Maugeri at Harvard Kennedy School.

NOTE – The United States is already the world’s number one oil producer in terms of all liquid oil production.

The shale oil counts as crude oil so 10.4 million bpd would put the US as the number one crude oil producer in the world in 2017 unless there is increased production from Russia and/or Saudi Arabia. Updated EIA oil production comparison between USA, Russia and Saudi Arabia is here.

He used a possible best-case scenario encompassing a West Texas Intermediate (WTI) price of $85 per barrel in 2013, $80 per barrel in 2014, $75 in 2016, and $65 long term, along with an 8 percent per-well cost reduction per year through 2017 (that is consistent with what is already happening across the shale industry), and the progressive easing of the transportation problems that now imply significant price discounts for most of U.S. shale crude oils. My projection of the total U.S. oil potential also assumes that, from 2013 to 2017, more than 6,000 new oil producing wells are brought online annually in the shale/tight oil arena alone

Maugeri said the number of American shale oil wells in North Dakota and Texas could soar from the current 10,000 to more than 100,000 working wells by 2030. He said steady improvements in technology and cost would continue to drive industry growth in the shale oil fields in the Dakotas and Texas.

The United States holds more than 60 percent of global drilling rigs, and 95 percent of American rigs can perform horizontal drilling, which along with hydraulic fracturing (“fracking”), is necessary to exploit shale oil.

Some Details

He estimates of recoverable oil reserves from Bakken-Three Forks is about 45 billion barrels.

Given the oil price scenario he used for this study, he assumed that if the number of Bakken’s new producing wells increases progressively by 12–20 percent a year from 2013 on, the play may reach a crude oil production of 1.8 mbd by 2017.

Given the oil price scenario he used for this study, he assumed that if the number of Eagle Ford’s new producing wells increases progressively by 15–25 percent a year from 2013 on, this shale formation could reach a crude oil production of 1.5 mbd by 2017.

He assumed that, from 2014 on, the number of new producing wells would increase by 25 percent a year, allowing the Permian Basin shale crude oil production to exceed 1.3 mbd by 2017.

Considering the scarce data available for all U.S. shale oil plays other than the Big Three, he could not model the evolution of their future liquids production.

However, according to a probabilistic method (with a ±50 percent probability ratio of production, based on yet-to-find discoveries) assuming a number of new producing wells per year growing from 200 to 1,000 in 2017, with an average production of 30,000 b/d of crude oil during the first 12 months, he projected a cumulative crude oil production from all other U.S. shale oil plays of 400,000 crude oil b/d by 2017. This could be a highly conservative estimate, but in the absence of more reliable data, it is not possible to go beyond that hypothetical assumption.

Winners and Losers

The US will have less oil imports if this happens.
Coal usage will be a loser, but more coal will be exported.
Ethanol and biofuel liquid growth will be flat or negative.

SOURCE – Harvard

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