Maybe Hubbert’s Peak isn’t the tallest mountain after all.
North American oil production will hit a new all-time high by 2016 given the current pace of drilling in the U.S. and Canada, according to a study released by an energy research firm this week.
U.S. oil production in areas like the Permian Basin, the Eagle Ford, Bakken and others will rise by a little over 2 million barrels per day between 2010 and 2016, according to data compiled by Bentek Energy, a Colorado firm that tracks energy infrastructure and production projects.
It’s a reversal of the steady downward production trend that started around 1970, when U.S. oil production peaked at around 9.5 million barrels per day.
Canadian crude production is expected to grow by about 971,000 barrels per day between 2010 and 2016, with much of it headed for U.S. refineries.
Combined, the U.S. and Canadian oil output will top 11.5 million barrels per day, which is even more than the amount produced at the peak in 1972.
The data assumes production levels stay roughly where they are right now, but the study doesn’t take into account predictions of growing global oil demand or the higher prices that follow.
The data was unveiled at a forum on natural gas liquids hosted by Platts in Houston this week.
That production growth will be bumping up against pipeline capacity to move the crude to refineries and other users, said Rusty Braziel, Bentek’s vice president of sales and marketing.
In the past, the flow of oil in the U.S. tended to be from the South to the North/Northeast – mainly from the producing regions of Texas, Oklahoma and Louisiana to consumers in major cities.
But Canadian oil production is surging and most of the booming oil fields in the U.S. are located along a region that roughly runs south from North Dakota through West Texas. There’s an oversupply of oil to the Midwestern refineries, which has prompted construction of pipelines to move crude to the established refinery complexes along the Gulf Coast.
TransCanada’s hotly debated Keystone XL pipeline is the most visible of those projects, with plans to move Canadian tar sands oil all the way to refineries in Port Arthur, Texas. There are a number of other new pipelines in the works, however, as well as expansion of existing lines and reversals of existing North-to-South pipelines being considered.