According to the latest Short-Term Energy Outlook from the US Energy Information Administration (EIA), total US crude oil production will reach a new record high, potentially helping to avoid a shortfall in supply.
The EIA predicts that crude oil production will be 12.61 million barrels per day (bpd) this year, which is considerably more than the 11.89 million bpd of last year and ahead of the pre-pandemic record of 12.32 million bpd in 2019.
This contrasts with some expert opinions that shale oil production was running out of steam. For example, Bloomberg reported in November last year:
“The projection suggests the pace of US shale growth, one of the few sources of major new supply in recent years, is slowing despite oil prices hovering at around $90 a barrel, about double most domestic producers’ breakeven costs.”
While the shale industry has had challenges to face—such as high input costs, labour shortages and pressure from investors to maximise returns—the industry has managed to consistency improve drilling and cost efficiencies. For example, ExxonMobil—the maker of the Mobil grease, coolant and lubricant range, recently announced it was working on improving fracking technologies to double the amount of crude produced from a well.
Refracturing is also a promising technique. This enables operators to return to previously exploited wells and hydraulically fracture them for a second time. This can be done for a fraction of the cost of completing a new well, yet it can restore output to near-original levels.