Crude oil production increased by 790,000 barrels per day (bbl/d) between 2011 and 2012, the largest
increase in annual output since the beginning of U.S. commercial crude oil production in 1859. The U.S.
Energy Information Administration (EIA) expects U.S. crude oil production to continue rising over the
next two years represented in the Short‐Term Energy Outlook (STEO).
U.S. crude oil output is forecast to rise 815,000 bbl/d this year to 7.25 million barrels per day, according to the February 2013 STEO. U.S. daily oil production is expected to rise by another 570,000 bbl/d in 2014 to 7.82 million barrels per day,the highest annual average level since 1988. Most of the U.S. production growth over the next two years will come from drilling in tight rock formations located in North Dakota and Texas. This paper explains the underpinnings of EIA’s short‐term forecast for crude oil production.
Increasing tight oil production is driven by the use of horizontal drilling in conjunction withmulti‐stage hydraulic fracturing, which provides both high initial production rates and high revenues at current oil prices. Additional technological and management improvements have increased the profitability of tight oil production,thereby expanding the economically recoverable tight oil resource base and accelerating the drive to produce tight oil. These technology and management improvements include, but are not confined to:
Multi‐well drilling pads
Extended reach horizontal laterals up to 2milesin length
Optimization of hydraulic fracturing throughmicro‐seismic imaging and enhanced interpretation
Simultaneous hydraulic fracturing of multiple wells on a pad
Drilling bits designed for specific shale and tight formations
“Walking” drilling rigs
Further improvements in technology,such as selective fracturing along the horizontal lateral (the horizontal section of a well)to avoid zero or low production stages, based on local geologic characteristics,might further improve the economics of tight oil production. Even so, diminishing returns to scale and the depletion of the high‐productivity “sweet spots” are expected to eventually slow the rate of growth in tight oil production. It is difficult to predict when that inflection point will be reached because it can be pushed farther into the future by increases in the number of drilling rigs and further technological change.
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U.S. crude oil output is forecast to rise 815,000 bbl/d this year to 7.25 million barrels per day, according to the February 2013 STEO. U.S. daily oil production is expected to rise by another 570,000 bbl/d in 2014 to 7.82 million barrels per day,the highest annual average level since 1988. Most of the U.S. production growth over the next two years will come from drilling in tight rock formations located in North Dakota and Texas. This paper explains the underpinnings of EIA’s short‐term forecast for crude oil production.
Increasing tight oil production is driven by the use of horizontal drilling in conjunction withmulti‐stage hydraulic fracturing, which provides both high initial production rates and high revenues at current oil prices. Additional technological and management improvements have increased the profitability of tight oil production,thereby expanding the economically recoverable tight oil resource base and accelerating the drive to produce tight oil. These technology and management improvements include, but are not confined to:
Multi‐well drilling pads
Extended reach horizontal laterals up to 2milesin length
Optimization of hydraulic fracturing throughmicro‐seismic imaging and enhanced interpretation
Simultaneous hydraulic fracturing of multiple wells on a pad
Drilling bits designed for specific shale and tight formations
“Walking” drilling rigs
Further improvements in technology,such as selective fracturing along the horizontal lateral (the horizontal section of a well)to avoid zero or low production stages, based on local geologic characteristics,might further improve the economics of tight oil production. Even so, diminishing returns to scale and the depletion of the high‐productivity “sweet spots” are expected to eventually slow the rate of growth in tight oil production. It is difficult to predict when that inflection point will be reached because it can be pushed farther into the future by increases in the number of drilling rigs and further technological change.
Read more
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