North America will reach petroleum independence within the next decade, contributing to a drop in global crude prices, a Hart Energy refining expert said Thursday.
The rapid growth of oil and natural gas production in the Untied States will have a major impact on the world’s petroleum marketplace, Terry Higgins said during a presentation to industry insiders at the Petroleum Club in downtown Houston. The shift will allow the United States to surpass Saudi Arabia’s production, cause OPEC to lose market share and make the United State the world’s No. 1 producer of petroleum liquids.
“The single most critical driver in the world is what’s happening in North America,” Higgins said. “It doesn’t have anything to do with any proposed policy. This is really going to happen. We actually will be energy self-sufficient.”
He forecast that unconventional oil production from shale and other tight formations will help lead to an additional 4 million barrels per day in the U.S. over the next decade. The country currently produces about 5.6 million barrels per day.
More modest projections from the U.S. Energy Information Administration forecast the nation will reach about 6.5 million barrels by 2025.
As a result of that supply growth and declining domestic demand for petroleum products, Higgins forecast that the West Texas Intermediate benchmark crude oil price will drop below $80.
Still, U.S. refineries will remain active because of the lower cost of U.S. crude, he said.
“To sustain refinery utilization, we need to be expanding our product exports,” Higgins said. “With that kind of competitive advantage, I think we can do that.”