The U.S. Energy Information Administration’s (EIA) Annual Energy Outlook 2021 Reference case, which assumes current laws and regulations through 2050, projects domestic crude oil production to return to 2019 levels by 2023 and then remain near 13 million to 14 million barrels per day (b/d) through 2050. The United States continues to be an integral part of global oil markets and a significant source of supply, despite uncertainty surrounding post-pandemic expectations for oil and natural gas demand.
Oil prices are a key driver of projected drilling activity and accompanying U.S. crude oil production rates. In the Reference case, EIA projects that the Brent crude oil price increases (in real dollar terms) from its 2020 average of $42/barrel (b) to $73/b by 2030 and to $95/b by 2050. Two sensitivity cases show how EIA expects crude oil production to change with higher or lower crude oil prices.
In the High Oil Price case (where the oil price exceeds $130/b by 2030 and $170/b by 2050), crude oil production rises to more than 18 million b/d. The Reference case shows domestic production after 2030 plateauing in the 13 million to 14 million b/d range. In the Low Oil Price case (where oil prices never rise to more than $50/b through 2050), domestic crude oil production does not return to its pre-pandemic peak of 12 million b/d in 2019.
Production from tight oil formations is primarily driving EIA’s Reference case projection for growth in U.S. crude oil production. Most of this tight oil production comes from the Wolfcamp play in the Permian Basin, which spans parts of western Texas and eastern New Mexico, along with the Bakken play in the Williston Basin in Montana, North Dakota, and South Dakota.
Estimates of technically recoverable tight or shale crude oil and natural gas resources are uncertain. So, EIA provides two sensitivity cases, the High and Low Oil and Gas Supply cases, which explore the effect of higher and lower resource supply levels on domestic production, including tight oil.
More information on EIA’s long-term projections for crude oil production is available in the Annual Energy Outlook 2021.
Principal contributor: Estella Shi
Original source: EIA.gov