The flow of oil from U.S. shale fields is projected by government analysts to fall 14 percent by 2017, as the reverberations of the recent crash in crude prices are felt.
Production from those shale fields had increased exponentially over the past decade as hydraulic fracturing and horizontal drilling techniques were improved. Shale oil now accounts for more than half of the nation’s crude output.
But according to a report Monday by the U.S. Energy Information Administration, shale oil output – which peaked in 2015 at 4.9 million barrels a day – will fall to 4.2 million barrels by the end of next year.
The fall is “mainly attributed to low oil prices and the resulting cuts in investment. However, production declines will continue to be mitigated by reductions in cost and improvements in drilling techniques,” the report reads.
After 2017 government analyst are more bullish, predicting that by 2040 shale oil production will increase 45 percent from 2015 levels to 7.1 million barrels a day. U.S. natural gas production from shale would more than double to 79 billion cubic feet a day – with no drop off in production in the short-term.
Those predictions are predicated on analysts ability to predict future oil prices. In the report, EIA explains that fluctuations in oil prices could cause wild production swings. In the event of high prices, shale oil would reach more than 12 million barrels a day by 2040. If prices were low, production could fall close to 3 million barrels a day.
The EIA also predicts that by 2019 the Bakken formation, which spans North Dakota and Montana, will be the country’s largest oil field, surpassing the Eagle Ford field in South Texas. By 2040, analysts predict, the Bakken will produce 2.3 million barrels per day, almost a third of the nation’s shale oil output.