U.S. Oil Now 10% of World Total
For those of you who are wondering why the U.S. Energy Information Administration (EIA) is claiming that 7.84 million is 10% of global production we’ll explain. According to the EIA and the International Energy Agency (IEA) and OPEC, total global production in 2014 will average right around 90 million barrels a day, meaning that 10% would equal 9 million barrels.
But those 90 million barrels include stuff like condensates and natural gas liquids that are categorized as “liquids” but that aren’t really crude oil. None of that stuff can be refined into gasoline. It’s used to make plastics and a variety of chemicals and other products, but it is lumped in with crude oil because it makes the numbers both easier to report and easier to make look better.
That said, producing 10% of the world’s supply of crude is a milestone. The last time the U.S. produced that much crude was 25 years ago, in 1988. U.S. production hit a recent low of 5 million barrels a day in 2008, before the boom in horizontal drilling and fracking took hold. In the 5 years since then production has risen every year and the annual increase between 2012 and 2013 was nearly 1 million barrels a day.
The EIA reported on Thursday that the U.S. and Canada are the only major producers of tight oil in the world, and the U.S. share of that production is 91%. Just two U.S. shale basins produce 63% of U.S. tight oil: the Bakken shale in North Dakota produces 28% of the total and the Eagle Ford shale in Texas produces 36% of the total.
Here’s an EIA chart that illustrates the growth in tight oil production since 2005.
EIA Note: Actual Canadian tight oil production figures are only available through June 2013. Canadian tight oil production through February 2014 estimated based on national production averaging 0.34 million barrels per day for 2013, and projected growth rates through the first two months of 2014.