US shale crude could soar, but needs care.
The surprisingly optimistic assessment of the country's fastest-growing source of new oil came from the National Petroleum Council in a report to Energy Secretary Steven Chu -- but it also came with a warning against excessive regulation.
By 2035, shale oil -- also known as "tight oil" because it is sandwiched between hard layers of shale rock -- could produce 2 to 3 million barrels of oil per day (mbpd) given the right regulatory environment and technology breakthroughs, said the panel, which includes a who's who of the oil and gas industry. Output from such fields has jumped from near nil to around 600,000 bpd. The increase in supplies would be equivalent to about a 50 per cent boost in current domestic output, but far from enough to replace imports. The US consumes about 20 mbpd, importing about half of that.
The potential growth in oil production that could come from shale oil, offshore drilling, and the Canadian oilsands belies the conventional wisdom that North American oil production is on an inevitable decline, said Andrew Slaughter, a Shell official who led the council's study of resources.
"The potential is very significant, and if choices are made to develop those resources, that decline could actually turn up into growth," Slaughter told reporters. But if the federal and state governments crack down on the "fracking" practices of companies or change tax treatment for oil exploration and production, production could stagnate at about 600,000 bpd, the report said.
The National Petroleum Council has advised the US government on oil issues since the Second World War. Its latest study involved more than 400 people. The study team was led by Jim Hackett, chief executive of Anadarko Petroleum, Marvin Odum, CEO of Shell's North American unit, and Aubrey McClendon, CEO of Chesapeake Energy.
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|Publication:||Oil & Gas News|
|Date:||Sep 26, 2011|
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