The Energy Information Administration has offered forecasts that indicate domestic oil production in the U.S. could reach its highest level in 26 years next year. In addition, average oil prices worldwide could drop to $99 that same year, from 2012’s $112/barrel.
Increasing production and the continued discoveries of shale reserves could mean U.S. imports of oil would drop by as much as a quarter between now and 2014. These imports have consistently dropped since 2005 from levels of 12.5 million barrels per day.
According to the EIA, imports will be down to as low as 6 million barrels per day by next year. Domestic production will have risen to 7.9 million bpd from 2012’s 6.4 million bpd, which would be the highest since 1988.
The BBC reports:
“US oil production is rising extraordinarily quickly, entirely because of the application of fracking, [which is] unleashing very significant new resources into the market,” Seth Kleinman, global head of energy strategy at Citigroup, told the BBC.
Even more ambitious, the International Energy Agency has predicted that the U.S. may even surpass Russia as the world’s dominant gas producer as soon as 2015. Should present trends continue or improve, the U.S. could become close to self-sufficient in national energy needs by 2035.
This abundance of gas driven by fracking is, of course, accountable for the reduction in imports mentioned earlier. The low price of natural gas right now is driving a shift away from conventional fuel applications and toward natural gas-fueled projects.
But the U.S. will likely also make use of oil and gas production for export purposes, surpassing Saudi Arabia in oil production by 2020 or so (per the IEA).