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US Tight Oil Technology Could Boost Output by 25%


There continues to be great potential for surprises to the upside in production of U.S. tight oil according to Wood Mackenzie’s latest integrated analysis.

“Growth in U.S. tight oil continues to impress as development technology and techniques have yet to mature beyond adolescence,” said Phani Gadde, Senior North America Upstream Analyst for Wood Mackenzie.

To better illustrate, Gadde said additional volumes from Enhanced Oil Recovery (EOR) will come on stream after 2020, and could add 1.5 to 3 million barrels per day (mb/d) by 2030, up to 25 percent more oil than is being forecasted today. These technologies are in early test phase and not commercial yet, but indicators suggest up to a 100 percent increase in recovery rates. There are pilot tests that are underway with operators like EOG testing it out in the Eagle Ford adds Gadde.

“This is going to happen, like horizontal drilling and fracking, leading to another step-change in production technology,” added Skip York Principal Analyst, Americas Downstream, Midstream & Chemicals for Wood Mackenzie.

Wood Mackenzie’s analysis points out that the debate over whether the U.S. crude oil export ban may be lifted does not fully take technical advances in the development of U.S. tight oil into account.

“Policy makers need to get out in front of the next technological progression to not delay the full benefits,” signaled York.

York said if U.S. crude prices fall compared to international benchmarks, e.g., WTI-Brent, policy makers could lift the crude oil export ban to preserve current investment levels. This would result in improving domestic tight oil wellhead margins by approximately $5 per barrel, the margin improvement would then attract additional investment, yielding another 0.35 – 0.45 million barrels per day. This environment will attract ever more capital, where every $5 billion invested could yield additional production of nearly 0.4 mb/d over 5 years.

However, if the U.S. crude oil export ban remains, excessive production could drive down domestic crude oil prices by more than $30 per barrel versus their international benchmarks. This discount has the effect of stranding barrels in the reservoirs leading to no net change in U.S. tight oil volumes and EOR in core areas might simply push out more expensive volumes from emerging plays.

Ann-Louise Hittle, Head of Macro Oils for Wood Mackenzie, added a global perspective on the impact of additional tight oil output: “The fact these additional volumes are poised to have an impact after 2020 means the increased U.S. tight oil production above our current forecast is likely to be absorbed without a strong effect on Brent oil prices. This is particularly the case because of potential long-term political risk in key future sources of supply such as Iraq’s.”


27 Comments on "US Tight Oil Technology Could Boost Output by 25%"

  1. Northwest Resident on Tue, 23rd Sep 2014 2:10 pm 

    If Phani Gadde and Skip York say it, then it must be true.

    1.5 to 3 million barrels per day (mb/d) by 2030. Yes sir, “could” happen if only they can “mature” that fracking technology beyond “adolescence”.

    So, by 2030, we’ll have another 2 – 3 billion people on planet earth, all of the conventional oil will be long gone, we’ll have fracking technology matured beyond adolescence and an extra 1.5 to 3 million barrels of extremely low-energy oil per day.

    I’m sure we’ll be using condensate to power interstellar spacecraft by then too, and we’ll be shifting to unobtanium for our primary energy source.

    What a joke… You know how desperate they’re getting by the size of the bullshit lies they tell.

  2. Plantagenet on Tue, 23rd Sep 2014 2:32 pm 

    President Obama said the US energy strategy is “all of the above”. That means fracking tight oil and natural gas along with solar, wind, nuclear, geothermal, fusion, etc. Good to hear progress is being made.

  3. eugene on Tue, 23rd Sep 2014 6:12 pm 

    my thoughts are would this guy step up to the crap table and be this life on this? I don’t think so!! It’s called “don’t worry, be happy”. All this tells me is this guy is scared sh–less and is talking to himself for reassurance. When I was 11 my dad told me to go to my grandmothers vacant house (way off in the middle of nowhere)to get a shaving mug and I remember being very scared to go in there so I talked to myself. I hear a lot of that these days.

  4. steve on Tue, 23rd Sep 2014 6:30 pm 

    “When I was 11 my dad told me to go to my grandmothers vacant house (way off in the middle of nowhere)to get a shaving mug” Eugene?? Anyway I half agree with you if you look at this from a different angle all signs are pointing to trouble ahead…a lot of people here argue that the government does not know what is going on and I a google search on local town gets armored humvee…lots of hits…that is just one of many warning signs going on right now….

  5. Nony on Tue, 23rd Sep 2014 7:18 pm 

    I love it. More to make the doomers cry.

    TOD is dead, dead, dead.

  6. jjhman on Tue, 23rd Sep 2014 8:34 pm 

    I’ve been a peak oil doomer pretty much since 1973. Over the past 10 years or so I’ve really thought that the end was near but reality seems to have a different plan.

    The US peak in 1970 still hasn’t been reached but if you look at the EIA data we are now within about 23% of matching that peak and between 2008 and 2013 crude oil production has increased by 50%. The boys are on a tear! It actually seems possible that the 1970 peak will be exceeded.

    Yes, yes. I’m aware that world production per capita is down, that there are issues about energy content that no one understands, etc. But it seems that the oil guys keep pulling rabbits out of hats and that the ultimate issue is going to be climate, not oil.

  7. Northwest Resident on Tue, 23rd Sep 2014 9:03 pm 

    Nony — What are you crowing about? That projection is for 2030. By then conventional oil, at current rates of usage, will be all gone or very close to it. No amount of fracked low-energy tight oil is going to save the Cornies, or anybody else for that matter. But you know that. You’re just here to play the clueless role. Keep up the good work!

  8. Nony on Tue, 23rd Sep 2014 9:28 pm 

    I am going to just gloat like a madman after we break the 1970 Hubbert peak. Mwahahaha! 🙂

  9. Jared on Tue, 23rd Sep 2014 9:28 pm 


    and there, in a nutshell, is the agenda at play here… “do not stand in the way of our industry with your regulations, and do not say the word ‘ecocide’.”

  10. Jared on Tue, 23rd Sep 2014 9:29 pm 

    above, it took out my quoted passage… but the quote I was referring to was:

    “Policy makers need to get out in front of the next technological progression to not delay the full benefits,” signaled York.

  11. Nony on Tue, 23rd Sep 2014 9:34 pm 

    The truth is y’all are not really analysts predicting the end of oil. You’re treehuggers WISHING for the end of oil. At least know what you are.

    P.s. Go Bakken! 😉

  12. shallowsand on Tue, 23rd Sep 2014 10:47 pm 

    There wasn’t an explanation, even generally about the EOR techniques. Anyone know what they are? Water flood, steam, gas, CO2, polymer, all of the above? Something else?

  13. ghung on Tue, 23rd Sep 2014 10:50 pm 

    Yeah Nony, I’m a bona fide treehugger. Question is, why aren’t you? Wouldn’t be greed would it? At least know what you are.

    Congrats on your utter disconnect from things that really matter, like breathable air.

  14. forbin on Wed, 24th Sep 2014 5:28 am 

    … “where every $5 billion invested could yield additional production of nearly 0.4 mb/d over 5 years. ”

    what does he mean? 04 mb/day = 146mb pa

    not large with 86/90mb day world production

    and over 5 years? , uh ok put 5 biguns down and get 146mb pa / 5 years = 73mb pa

    about 68.50 per barrel

    well that puts a lower limit to the price of oil!

    no more $20 oil …..

    maths check me please someone !

  15. Davy on Wed, 24th Sep 2014 7:36 am 

    Forbin, don’t you love when the cornies talk too much and unconsciously prove themselves wrong elsewhere.

  16. shortonoil on Wed, 24th Sep 2014 8:02 am 

    If 25% is all they can do, the shale industry is going to be in big trouble very soon. Condensate production is beginning to fall very fast, and about 40% of US shale production is condensate. We pulled this graph from Ron’s site at PeakOilBarrel. It shows the declining production of condensate from of the Eagle Ford.

    Texas RRC Data Report

    Here is what is happening: Condensate (unlike oil which is a liquid in the ground) is a gas. The heavier fractions are dissolved in the high temperature/ pressure gas. When the gas flows out of the well its temperature and pressure fall. The heavier fractions “condensate” out of the gas into their liquid form at atmospheric temperatures, and pressures, and are retrieved.

    The gas in the well is forced out by its pressure. A condensate gas well is like a highly pressurized container with a hole drilled in it. As more gas is extracted the pressure falls in the well. When the pressure hits about 3000 psi the gas reaches its dew point (the pressure is no longer high enough to keep the oil dissolved in the gas) and all the heavier fractions fall out in the well, and are lost. There is little liquids production after the well reaches its dew point.

    In a formation that has to be frac’d to produce hydrocarbons because its permeability is too low for the fluids to flow through the rock naturally, the reservoir size is limited to the frac’d volume. These individual reservoirs are very, very small, about 300 to 400 million cubic feet. The pressure in these areas falls to the dew point quite rapidly.

    Thousands of these tiny reservoirs were drilled at about the same time, so it can be expected that they will hit their dew point at about the same time. Condensate production will plunge. These wells will stop producing liquids in mass. Drill Baby Drill, but the problem is that there is not enough drilling rigs on the planet to turn this around. In the graph above you are seeing the beginning of the end of the shale revolution. Shale production will undoubtedly soon be in terminal decline.

  17. Northwest Resident on Wed, 24th Sep 2014 9:30 am 

    “Shale production will undoubtedly soon be in terminal decline.”

    And so too, hopefully, will be the shale cheerleading antics of a couple of our regular nonsensical posters on this forum.

  18. JuanP on Wed, 24th Sep 2014 9:48 am 

    Short or Rock, If those thousands of gas wells stop producing condensates, will they be immediately closed down because the income from gas is below the costs of operation or is the gas money enough to keep a positive cash flow on those wells and keep them producing dry gas?

  19. Nony on Fri, 26th Sep 2014 8:48 am 

    Ron has been wrong on a lot of things (RRC data only changing substantially for last month correction, not understanding population age effect on decline, condensate percentage, etc.)

    citation for “40% of shale production is condensate”?

    The Eagle Ford ain’t in decline yet.

  20. Nony on Fri, 26th Sep 2014 8:52 am 

    I’d like to know how many peakers predicted almost 4 million bpd increase within 6years from U.S. shale? It sure wasn’t Hubbert, Campbell, Deffeyes, or ANYONE on the TOD site.

    Now you predict it will get lower. You know there were a couple serious studies that just came out predicting 2 million bpd in the Bakken before 2020? By serious study, I mean something paid for and done by professionals. Not a Gail shark fin. Not some junior college chemistry teacher.

  21. marmico on Fri, 26th Sep 2014 9:14 am 

    In 2012 Bentek projected 2.2 mb/d by 2022 in the Bakken, Goldman Sachs followed up in 2013 with 2 mb/d by 2020. Those were the optimists. The > 0.7 mb/d by 2020 were the pessimists. The optimists are on track through 2014.

    Apparently, the light of optimism doesn’t penetrate the darkness of the doomstead.

  22. Nony on Fri, 26th Sep 2014 4:06 pm 

    The Marcellus has eclipsed even the optimist projections. and the “median” EIA said they were laughable in how much lower their predictions were than the outcomes.

  23. ghung on Fri, 26th Sep 2014 5:22 pm 

    marmico: “Apparently, the light of optimism doesn’t penetrate the darkness of the doomstead.”

    Yeah, marm, folks like you and Nony continue to refuse to acknowledge that $trillions in government and Fed debt can buy a lot of ‘optimism’. You guys are like some kid who’s daddy cosigned a big loan to buy that fancy sports car, all-the-while telling people how successful you are. Maybe you’ll even get to keep the car after daddy declares bankruptcy. The price of this ‘oil revolution’ will be obscene in many ways.

  24. Davy on Fri, 26th Sep 2014 8:53 pm 

    G, Marm-a-duck and Noo like to blindly crow about optimism. I give thanks every day for a wonderful life but the difference is my optimism has a “sell by date”. That date is 3-5 yrs. Marm-a-duck and NOO offer no dates or clarifications IOW they are practicing snake oil salesmanship.

  25. Northwest Resident on Fri, 26th Sep 2014 9:03 pm 

    It takes a special kind of person to be exposed to all of the information presented on this and other similar websites, and yet to still hold the point of view that shale, technology or renewable energy somehow invalidate the doomer point of view. I can understand totally ignorant people not quite getting it — the ones who are just now tuning in to the peak oil/resources debate — I used to be one of those. But to have all the facts laid out before you and STILL be a cheerleader for shale, technology or renewable energy — like I said, that takes a special kind of person. Glad I’m not one of them. I’d rather face reality and prepare to meet it head on. THAT is how I express my optimism for the future.

  26. Davy on Fri, 26th Sep 2014 9:20 pm 

    NR, what you just described is simply doing the adult thing and that is stand up and face reality. We may live in an excessively complex world but that does not mean simplicity is gone. Actually paradoxically it is complex to be simple in this complex world. Cornies are so strong today because complexity is good at clouding reality and allows blind optimism. Optimism is almost a cult today. Like I said in an earlier comment I am very optimistic but with a “sell date”. Reality is telling me these happy days will not last much longer.

  27. Northwest Resident on Fri, 26th Sep 2014 9:42 pm 

    Davy — Another thing that the Cornies have on their side is the massive MSM propaganda machine. They either can’t cut through the thick fog of propaganda to see the truth, or they have psychological barriers that prevent them from making sense of the facts. Fear is powerful, and fear of the unknown is most powerful of all. And then there are those Cornies that probably do know the truth but they somehow get kicks out of playing the Cornie side and giggling when people try to talk sense into them. Those people aren’t actual Cornies, they’re just goofballs, and I think we have one or two posting regularly on this site. But yeah, I sense that this whole charade is coming to a rather abrupt end, and sooner than we know. It IS coming to an end, that’s a fact and the reality we have to deal with. When is the only question.

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