• Shale oil production has been accelerating in US,growing from 111,000 barrels per day in 2004 to553,000 barrels per day in 2011 (equivalent to agrowth rate of around 26% per year). As a result,US oil imports are forecast this year to fall totheir lowest levels for over 25 years.
Estimates by the US Energy Information 25Administration (EIA) suggest that shale oil
- production in the US will rise more slowly in
the future to around 1.2 million barrels per day
by 20351 (equivalent to 12% of projected US
production at that date). However, these 15projections seem conservative relative to other
market analysts who forecast US shale oil
production of up to 3-4 million barrels per
day by that date.2- EIA estimates of the scale of total shale oilresources in the US have been revised upwardsfrom 4 billion barrels in 2007 to 33 billion barrelsin 2010, providing a significant contribution toincreased US energ
- Shale oil could make the largest single contributionto total US oil production growth by 2020, withthe proportion of production from conventionalsources remaining relatively stable.
- In the long term, we estimate that shale oilcould displace around 35-40% of waterbornecrude oil imports to the US. This would createadditional effective supply to other locationssuch as China. However, should China start toexploit its own shale oil resources(as discussedfurther below) this would further decrease itsimport dependency and increase effectivesupply to oil importing countries.
- Rapid production growth in shale oil is havingdramatic local effects on pricing in areas whereshale oil is produced but access to exportinfrastructure is limited. The US domestic oilprice has already decoupled from global indicesand imports are forecast to decline (as shownChart 2 below). Put simply, increased shale
oil production could lead to oil prices thatare significantly lower than projected incurrent forecasts.
