News

A new report from the International Energy Agency (IEA) predicts that despite low oil prices, domestic shale gas and tight oil production are on the upswing due to innovative technologies.  Furthermore, this production will allow the U.S. to remain a leading global producer.

In the IEA’s annual Medium-Tem Oil Market Report, the agency predicts that US oil production will reach record highs over the next five years due to this continued innovation in the hydraulic fracturing (fracking) process.

While the report does concede that US tight oil production still faces challenges from the global supply glut, IEA predicts the markets will re-balance over the next two years, after which the US will lead global oil production gains. As the press release states:

“US production is seen reaching an all-time high of 14.2 [million barrels per day] by the end of the forecast period, but only after falling in the short term.”

These predictions reaffirm the findings of several other recent government and industry reports, such as BP’s Global Energy Outlook and the U.S. Energy Information Administration’s Short Term Energy Outlook (EIA).

In its Global Energy Outlook, BP notes that economists and industry enthusiasts have a long history of underestimating the outlook for U.S. shale, and have to consistently revise up their forecasts.

As BP Economist Spencer Dale described:

“We have been repeatedly surprised by the strength of U.S. shale, technological innovations and productivity gains have unlocked vast resources of tight oil and shale gas, causing us to revise our projections successively higher.  This year is no exception, with sizeable up revisions for both tight oil and shale gas.” (Emphasis added)

While gains will be made fo...