U.S. EIA Expects Future U.S. Tight Oil and Shale Gas Production to Depend on Resources, Technology, Markets

Abstract

Based on projections in the U.S. Energy Information Administration's AEO2017, U.S. tight oil production is expected to reach 7.1 million barrels per day (b/d), and shale gas production is expected to reach 79 billion cubic feet per day (Bcf/d) in 2040. These values reflect Reference case projections, while several side cases with different assumptions of oil prices, technological advances, and resource availability have different levels of tight oil and shale gas production. U.S. production of tight oil and shale gas has increased significantly from 2010 to 2016, driven by technological improvements that have reduced drilling costs and improved drilling efficiency in major shale plays, such as the Bakken, Marcellus, and Eagle Ford.

Production from tight oil in 2016 was 4.9 million barrels per day, or 52% of total U.S. crude oil production. As oil prices recover, oil production from tight formations is expected to increase. By 2019, Bakken oil production is projected to reach 1.3 million b/d, surpassing the Eagle Ford to become the largest tight oil-producing formation in the United States. Bakken production is projected to reach 2.3 million barrels per day by 2040, almost a third of the projected U.S. total tight oil production.

Natural gas production from shale gas plays in 2016 accounted for 41 billion cubic feet per day (Bcf/d), or 62% of total U.S. natural gas production. Natural gas production from shale gas plays is expected to increase through 2040 in the AEO2017 Reference case. The two Appalachian shale gas plays, the Marcellus and Utica, have factors favorable for production: shallower geologic formation depths and proximity to consuming markets. Both Appalachian shale gas plays have remained resilient to the low natural gas prices and are projected to continue to drive total U.S. production in the long term. Shale gas production in these plays is expected to reach more than 40 Bcf/d by 2040, providing just over half of U.S. total shale gas production.

Two oil price side cases illustrate the effect of higher or lower global crude oil prices on production from tight formations. By 2040, the global benchmark Brent crude oil spot price averages $73/b in the Low Oil Price case, $136/b in the Reference case, and $230/b in the High Oil Price case.

AAPG Datapages/Search and Discovery Article #90323 ©2018 AAPG Annual Convention and Exhibition, Salt Lake City, Utah, May 20-23, 2018