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Page added on July 11, 2018

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EIA: U.S. Shortly to Become “the World’s Leading Producer of Crude Oil”

Production

The U.S. Energy Information Administration (EIA) proclaimed on Tuesday that, if its forecasts are correct, “the United States will average nearly 12 million barrels a day (mbd) … in 2019 … mak[ing] the U.S. the world’s leading producer of crude [oil].”

Those forecasts could understate the U.S. oil industry’s production, as it builds into its calculations the present bottlenecks of pipeline capacity, being experienced especially in the Permian Basin.

One month ago, IHS Markit, the global information marketplace, focused on what’s happening in the Permian Basin and concluded that, even with those bottlenecks currently slowing the flow of crude from wellheads to refineries along the Gulf Coast, it expects a “stunning” increase in production there between now and 2023. Total crude-oil production will nearly double over that time to 5.4 mbd once the 41,000 new wells and $308 billion in new investment have been completed. Said Daniel Yergin, IHS Markit’s vice chairman: “In the past 24 months, production from just this one region — the Permian — has grown far more than any other entire country in the world. Add in another 3 mbd by 2023 — more than the total present-day production of Kuwait — and you have a level of production that exceeds the current production of every OPEC nation, except Saudi Arabia.”

One key assumption IHS Markit is making is that oil prices will stay around $60 a barrel or higher. And its forecast is “far from a best case” scenario, according to Raoul LeBlanc, HIS Markit’s executive director, who added, “That the outlook still expects the Permian to exceed existing (and already lofty) expectations speaks to the region’s unique and growing prominence in the world’s oil market. The level of growth — from 0.92 mbd in 2010 to 5.4 mbd in 2023 — is truly stunning.

The New American made just such a prediction about the U.S. oil industry way back in 1990, as we noted in a 2015 article:

Our October 8, 1990 cover story opined that “America was not running out of energy in 1973-74 [during the oil embargo], and it is not running out of energy today,” despite having “become so heavily dependent on foreign supplies.”

But why the dangerous dependency? “U.S. governmental treatment of our enervated energy sector is akin to strangling a patient, then exclaiming that this patient is undergoing an oxygen crisis,” we analogized in our 1990 essay. “Indeed he is, but this does not mean that the supply of oxygen in the atmosphere suddenly disappeared. American entrepreneurs will be able to alleviate whatever energy woes exist just as soon as the government stops strangling our free-enterprise system.”

Regarding oil, we not only cited specific examples of where drilling has been restricted or prohibited such as in the Arctic National Wildlife Refuge (ANWR) in Alaska, but we also predicted that the development of new recovery techniques would result in “deposits now deemed unrecoverable” becoming recoverable. Regarding “unconventional oil” such as “oil that can be extracted from tar deposits or shale stone,” we observed: “Should extraction of a significant portion of this unconventional oil become economical, America’s oil resources would increase dramatically.” And “increase dramatically” America’s oil resources did, as soon as fracking made the unlocking of the oil found in shale formations practical and economical.

Today it is well known that annual oil production in the United States has been steadily climbing in recent years. But when we wrote our 1990 assessment about America’s abundant energy resources including oil, U.S. annual production had been declining for years, seemingly supporting M. King Hubbert’s widely accepted forecast that U.S. peak oil would be reached around 1970. But Hubbert’s prediction of peak oil has turned out to be premature, to say the least.

Back in 1990, George Mitchell was experimenting with a way to extract oil from shale — oil that he knew was down there but, at the time, was not recoverable with present technology. But he found a way to extract it, with the Economist giving him credit for the breakthrough:

The rise [in shale gas] has been helped along by a variety of factors…. But the biggest difference was down to the efforts of one man: George Mitchell … who saw the potential for improving a known technology, fracking, to get at the gas.

Big oil and gas companies were interested in shale gas but could not make the breakthrough in fracking to get the gas to flow. Mr Mitchell spent ten years and $6 million to crack the problem (surely the best-spent development money in the history of gas). Everyone, he said, told him he was just wasting his time and money.

But even the Economist missed the point: Mitchell was operating in a culture that rewarded such adventurism and experimentation, if he was successful. And that culture was, and is, founded on the limitations of government built into the Constitution of the United States, the rule of law, and enforcement of contracts. Mitchell, probably not even knowing it at the time, was part of Adam Smith’s “invisible hand.” Smith in his Wealth of Nations explained how Mitchell, in working to solve the riddle of fracking, was actually working for the benefit of all mankind:

He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

When Mitchell died in 2013, Forbes considered him to be one of the world’s 500 richest people. His legacy, however, exceeds his personal fortune (gained by seeking and finding the magic fracking formula) a thousand-fold, and resonates today as the United States will shortly become the world’s leading producer of crude oil.

thenewamerican



20 Comments on "EIA: U.S. Shortly to Become “the World’s Leading Producer of Crude Oil”"

  1. Anonymouse1 on Wed, 11th Jul 2018 8:13 pm 

    RoFL

  2. twocats on Wed, 11th Jul 2018 8:13 pm 

    the level of delusion is about as strong as it was in the lead up to 2007-08. back then it was faith in conventional. this time faith in unconventional. humanity is helmed by people of faith. good for them.

  3. "Lucifer" on Wed, 11th Jul 2018 8:33 pm 

    twocats, i guess you have no faith, lol.

  4. Duncan Idaho on Wed, 11th Jul 2018 9:08 pm 

    So the US will only need to import 5+ million barrels a day?

  5. MASTERMIND on Wed, 11th Jul 2018 9:13 pm 

    Twocats

    And don’t forget America’s faith based computer voting system..Its all an illusion..

  6. GetAVasectomyAndLetTheHumanRaceDieGracefully on Wed, 11th Jul 2018 9:26 pm 

    It is news post like the one that make me believe that there is no future for the human specie.

    We now live in a world where 90% of people make their own reality and believe in their own bullshit.

    You cannot build anything with stupid people and people that build their own reality and believe in it.

    OK maybe the human specie won’t die off, there maybe two or there primitive tribe in South America and South aSia that might survive by hunting eating insects and hunting wild animal.

    There is no point building anything and fight for the survival of the human race at this point.

  7. GetAVasectomyAndLetTheHumanRaceDieGracefully on Wed, 11th Jul 2018 9:29 pm 

    Alexandria Ocasio-Cortez tde new star of the democratic party is a good example of someone making her own reality.

    https://www.youtube.com/watch?v=P9yzkCiNZQM

    This dumb cunt should be put in a whore for all men to use for a fast sexual release. She is no good for anything else.

  8. GetAVasectomyAndLetTheHumanRaceDieGracefully on Wed, 11th Jul 2018 9:30 pm 

    whore house

  9. MASTERMIND on Wed, 11th Jul 2018 9:33 pm 

    Some people think there are way too many people on the planet living off $1 a day or less. If we got rid of those people, we could keep consuming incredible amounts of resources for much longer.

  10. GetAVasectomyAndLetTheHumanRaceDieGracefully on Wed, 11th Jul 2018 9:45 pm 

    The stupid people have moves up into powerfull postion and are now fucking thing even more:

    Some names:

    Canada: Justin Trudeau and Andrew Sheer, two beta cuck with feminine body language.

    US: Donald Trump, Hillary Clinton two stupid liar and corrupt people

    UK: Theresa May she is a total idiot

    France: Macron is a sexual deviant that is into ADBL. Adult Baby/Diaper Lover (ABDL) He is also an idiot Why do you think is loves older women

    Merkel is also an idiot

    You cannot build anything with stupid people. They only destroy.

  11. tommywantshismommy on Wed, 11th Jul 2018 9:52 pm 

    Read it and weep boys! USA USA USA …Rocky loves Emily…Rocky loves Emily. In 10 years we’ll have our flying cars and 10 cent a gallon fossil fuels to power them!! Can’t wait. No chance of collapse ever.

  12. Outcast_Searcher on Thu, 12th Jul 2018 2:01 am 

    When the fast crash Cassandras are proven wrong again and again, instead of ever admitting they were wrong (at least in the short term), it’s whining, sarcasm, and more likely bad predictions.

    Wow. They’re just SO damn credible!

  13. peakyeast on Thu, 12th Jul 2018 7:43 am 

    There is plenty of fast crashes already. Each time a country on earth crashes into chaos it gives the others a little extra time.

    And then there are the power-mob countries like the US who can steal from the rest of the world by manipulating the global economy.

  14. MASTERMIND on Thu, 12th Jul 2018 8:27 am 

    Outcast

    We live in frightening times. It’s my belief that “you personally” will most likely die of starvation or conflict between 2020 to 2040.
    You will experience a collapse of human civilization, a die-off of humans, a destruction of the ecosystem, a loss of access to mined and drilled resources, and a dark age from which your descendent’s will not reemerge.
    https://imgur.com/a/pYxKa

    Simple really….when the World Economy Collapses everything shuts down…the end… We’re talking about grids down all over the world and 7.5B people dropping like f*** flies in short order. The collapse will be absolutely horrible..There is no collapse or horror movie ever produced that has even come close to imagining what the collapse of BAU might look like. I’m talking about every corporation and every social program going bankrupt at once. I’m talking about people eating people. I’m talking about the Worst Catastrophe to ever happen in the history of mankind. Nothing has ever, or will ever come close..

  15. twocats on Thu, 12th Jul 2018 8:35 am 

    not a single “fast crash” prediction on the thread Full-O-Shit – so STRAW MAN.

    the EIA predictions for the next year are just not going to happen. why? who knows. probably to keep oil prices in check. what does that mean? hard to say – more than likely they will slowly revise their numbers to match reality as the months roll along. in that time they can hope for a change in the landscape that makes the prediction of high production unnecessary (like the burgeoning trade war).

  16. twocats on Thu, 12th Jul 2018 8:39 am 

    well i guess there’s one now. you got baited MM. I wouldn’t bother MM – he’s a troll – nothing more. OS does not live in frightening times. hard to tell what OS’s purpose is – but trolls generally take pleasure in trolling for its own sake.

  17. GetAVasectomyAndLetTheHumanRaceDieGracefully on Thu, 12th Jul 2018 9:26 am 

    People say fast crash cannot happen. Because it is not happening where you live, does not means it is not happening somewhere else.

    Fast crash is now happening in California.

    https://www.youtube.com/watch?v=gnyNMpIBmZA

  18. twocats on Thu, 12th Jul 2018 5:40 pm 

    sorry GAVALTHRDG – not fast crash stuff. if anything Fox is more indicative of the decline of an organized humanity than a bunch of homeless people in LA.

  19. Makati1 on Thu, 12th Jul 2018 5:41 pm 

    “EIA: U.S. Shortly to Become “the World’s Leading Producer of Crude Oil””

    HAHAHAHAHAHAHAHA! Tell me another one! LMAO

  20. Anonymous on Sat, 14th Jul 2018 1:14 am 

    North Dakota just set a new production record. This was after the peak oilers had said it was dead.

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