According to a recent report from the U.S. Energy Information Administration (EIA), rising domestic oil output will reduce the need for oil from abroad to the point that American production will soon exceed the volume of imports for the first time since February 1995.
The agency's Short Term Energy Outlook asserted that it is likely the two rates will meet – while traveling in opposite directions – sometime in 2014. However, analysts suggested that the milestone could come as soon as the end of the current year.
Oil production to rise by more than 1 million barrels per day by 2014
In 2012, U.S. oil production averaged 6.5 million barrels per day. The EIA has predicted that this number will rise rapidly during the next two years, reaching 7.3 million barrels per day by the end of 2013. The following year, the nation's daily production could be as high as 7.9 million barrels.
Onshore oil and gas wells will contribute the majority of the increase in domestic output, with offshore exploration and production activities growing at a much slower pace, according to the EIA. The agency specifically noted that expanded drilling in the Williston, Western Gulf and Permian basins will be critical to the realization of its projections.
Growth of domestic oil production will drive an ongoing reduction in import volume
Americans consumed more than 7.4 million barrels of foreign oil per day in 2012. While these supplies met a significant proportion – about 40 percent – of the nation's oil needs, the United States is far less dependent on imports than it was in 2005. During that year, the country imported 12.5 million barrels of oil per day, using shipments from abroad to meet more than 60 percent of its needs.
The downward trend in foreign oil consumption is expected to continue in the coming years as increased domestic production renders high levels of imports unnecessary.
By the end of 2014, imports are expected to drop to around 6 million barrels per day, which would account for approximately 30 percent of U.S. consumption – the lowest level since 1985.
Technological advances will be key to realizing optimistic outlook
Rising domestic oil production promises to significantly bolster the U.S. economy by reducing the need for costly imports, creating jobs throughout the country and ensuring a steady supply of key transportation and industrial fuels. Decreased costs for generating electricity will also help spur economic growth by making it more competitive to build things in America.
However, it is critical for industry stakeholders, policy makers and members of the public to recognize that there is hard work ahead on the path to this prosperous future. The EIA was only outlining possibilities, and the scenario is by no means inevitable.
As oil and gas producers seek to tap into more challenging reservoirs, the range of geological obstacles facing them will proliferate. Implementing new technologies will be critical to overcoming these problems.
The hydraulic jet pump has become known as one of the most versatile solutions available to well operators today. It can be used to complete drill stem testing and maximize production at new or established sites – even those in which issues with the casing preclude the use of other artificial lift solutions.