Some of the latest research on U.S. petroleum reserves paints a refreshingly optimistic picture of our future capacity – not just in shale gas which is often touted as the fuel of the future, but for oil as well.
One study from the National Petroleum Council found that the United States and Canada, combined, could be producing 22.5 million barrels per day by the year 2035, an amount about equal to current domestic demand today. The report finds that the same technologies — such as hydraulic fracturing and horizontal drilling — that have helped producers access more shale gas, could also unlock large volumes of so-called tight oil which has long been considered inaccessible. This trend of increased production, the report finds, would lead to job creation not just in the oil and gas industry, but also in the petrochemicals sector, which relies on oil and gas as key feedstocks.
The National Petroleum Council’s report follows another recent study from Goldman Sachs finding that the U.S. – currently the world’s third largest oil producer behind Saudi Arabia and Russia – could become the largest later this decade.
Such numbers are good, but definitely not too good to be true. In a recent Wall Street Journal piece, Daniel Yergin takes an in-depth look at the history of the peak oil discussion and explains why the doomsayers have repeatedly underestimated the United States’ oil-producing potential. Take as just one example, the Bakken formation in North Dakota. Just eight years ago, it was producing about 10,000 barrels per day, but today that has risen to more than 400,000 bpd, and North Dakota is the fourth largest oil-producing state in the country, thanks largely to that “tight oil” that the National Petroleum Council references in its report.