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Shale oil to continue to lead U.S. production

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FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. REUTERS/Ernest Scheyder
FILE PHOTO: An oil pump is seen operating in the Permian Basin near Midland, Texas, U.S. on May 3, 2017. REUTERS/Ernest Scheyder

Oil recovered from shale and other tight-rock layers over the past decade revolutionized the country's oil industry, allowing production to return to peaks unimaginable in previous decades.

That trend is unlikely to change anytime soon, according to a report released Thursday by the U.S. Energy Information Administration.

The report found that the country's traditional oil production likely will hold flat near 4 million barrels a day over the next three decades, while tight oil production likely will continue to grow at least over the next few years to about 10 million barrels per day and will represent the bulk of the country's oil production through at least 2050.

"Tight oil production reached 6.5 million b/d (barrels per day) in the United States in 2018, accounting for 61 percent of total U.S. production," the report stated. "EIA projects further U.S. tight oil production growth as the industry continues to improve drilling efficiencies and reduce costs, which makes developing tight oil resources less sensitive to oil prices than in the past."

The numbers reflect the report's reference case. The report also includes numbers that reflect scenarios with higher- and lower-than-expected prices and high and low resource and technology.

The country's total oil production has surged to 12.1 million barrels a day last week, more than doubled from 5.5 million barrels a day a decade ago, according to the EIA. The sharp rise reversed more than 40 years of steady declines.

The bulk of the tight oil production is expected to be recovered from three fields: the Permian in southwest New Mexico and west Texas, the North Dakota Bakken and the Eagle Ford in south Texas. All other U.S. tight oil plays — including Oklahoma's STACK and SCOOP — together are projected to produce about 2 million barrels a day.

Modern drilling techniques — including horizontal drilling and hydraulic fracturing — are newer to Oklahoma's fields than the country's three most active. Oklahoma's core drilling areas also appear to cover a smaller area than those of the top fields. But the officials from the companies active in Oklahoma have expressed optimism that production will continue to grow throughout the basin as drilling expands.

Adam Wilmoth

Adam Wilmoth returned to The Oklahoman as energy editor in 2012 after working for four years in public relations. He previously spent seven years as a business reporter at The Oklahoman, including five years covering the state's energy sector.... Read more ›

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