1. From the Associated Press article U.S. Could Surpass Saudi Oil Output by 2020″”
U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world’s biggest producer. Driven by high prices and new drilling methods, U.S. production of crude and other liquid hydrocarbons is on track to rise 7% this year to an average of 10.9 million barrels per day. This will be the fourth straight year of crude increases and the biggest single-year gain since 1951.
The boom has surprised even the experts. “Five years ago, if I or anyone had predicted today’s production growth, people would have thought we were crazy,” says Jim Burkhard, head of oil markets research at IHS CERA, an energy consulting firm.
The Energy Department forecasts that U.S. production of crude and other liquid hydrocarbons, which includes biofuels, will average 11.4 million barrels per day next year. That would be a record for the U.S. and just below Saudi Arabia’s output of 11.6 million barrels. Citibank forecasts U.S. production could reach 13 million to 15 million barrels per day by 2020, helping to make North America “the new Middle East.”
2. From today’s Wall Street Journal article “Renaissance in U.S. Oil Production“:
U.S. oil production is undergoing a renaissance, driven by the same technologies — hydraulic fracturing chief among them — that upended the gas industry. Domestic production is up some 20% since 2008. To put that into perspective, production had fallen by more than a third in the prior 20 years, and most experts figured the downward plunge was irreversible (see chart above).
The impact on imports is even more dramatic. Five years ago, the U.S. was importing 60% of its oil, a figure that had been rising since the early 1980s. Today, the U.S. imports just over 40% of its oil, the smallest share in 20 years.
“I’ve been in this business 43 years and this is the biggest change in my career,” says Bill Klesse, chairman and CEO of refiner Valero Energy Corp. Until recently, Valero’s refinery in Three Rivers, Tex., ran entirely on oil imported from West Africa and Venezuela. Today, 85% of it comes from wells in the nearby Eagle Ford shale. Up the coast, the company’s Houston refinery will soon use crude from North Dakota instead of from Africa.
“If you said three years ago that North America could be oil self-sufficient, it was a joke,” Mr. Klesse says. “But now, it’s very real.”