Last month, the International Energy Agency said that by 2015 the United States will surpass Saudi Arabia and Russia as the world's biggest oil producer and is on track to become energy self-sufficient in two decades. The agency added that for the next 10 years the recent U.S. and Canadian success with shale oil drilling and increased production from Brazil will reduce the role of the Organization of the Petroleum Exporting Countries as the world's most prominent oil producer.
It also said the U.S. is moving "towards meeting all of its energy needs from domestic resources in 2035," and that autonomy has been a major objective that has evaded the U.S. (To be clear, it's been a thorn in the side of every U.S. president since Eisenhower.)
While this assessment is obviously exceptional news for the U.S., the International Energy Agency couldn't keep from raining on the parade. It suggested that the U.S. position as the top world oil producer would be fleeting, and end by the mid-2020s "as resources diminish" at the Bakken and Permian Basin fields being tapped in North Dakota and Texas, respectively. And following that peak, OPEC would likely regain its position as the provider of most of the increase in the global oil supply.
Perhaps. But it appears that agency may be underestimating trend projections over time that show incrementally increasing volume estimates in both the Bakken region and West Texas; and it may be prematurely dismissing the substantial potential that lies in the rich reserves of California's Monterey Shale.
The New York Times reported that California's Monterey Shale comprises two-thirds of the U.S. total estimated shale oil reserves covering 1,750 square miles from Southern to Central California. The oil extracted from that region could turn California into the nation's top oil-producing state and yield the economic boom that "far smaller shale deposits" have delivered for North Dakota and Texas.
The U.S. Energy Information Administration estimates the Monterey Shale's untapped crude oil deposits at 15.4 billion barrels, more than four times the estimated volume in the Bakken Shale of North Dakota. What do you suppose that estimate might be three years from now?
Gregg Laskoski is a senior petroleum analyst with GasBuddy.com.