Source: SRSRocco Report, by Steve St. Angelo
The Mainstream media continues to delude the public into believing cheap shale oil production will make the United States energy independent. We now see articles suggesting that Americans will no longer need to rely upon the Middle East or OPEC for our future oil supply when all we need to do is ramp up our domestic shale oil production. Unfortunately, its not that simple or easy.
Matter-a-fact, the United States will never become energy independent because domestic shale oil production suffers from seriously high annual decline rates. What does that mean? That means, every year the top shale oil fields lose a massive amount of oil production, which can only grow by adding an even higher amount of new oil production… via a tremendous amount of drilling.
For the United States to become energy independent, it would have to produce an additional 4.5 million barrels of oil per day (mbd). Even though we import more than 7 mbd of crude oil, our net imports are 4.5 mbd. We export the remainder as various petroleum products.
Currently, the top four shale oil fields in the United States (Permian, Eagle Ford, Bakken & Niobrara) produced 4.8 mbd of oil. So, for the United States to become oil independent, we would have to double current shale oil production in these top four fields.
You see, that is a huge undertaking because these top shale oil fields are suffering from extremely high annual decline rates. The EIA – U.S. Energy Information Agency labels this decline as a “Legacy Decline.” I will label it as an “Annual decline rate” in this article. So, how bad are these annual decline rates? Let’s start by looking at what is taking place in the Bakken Field in North Dakota:
Bakken shale oil production peaked at 1.26 mbd in December 2014 and has fallen 25% to 963,000 barrels per day (bd) currently. The red area at the bottom of the chart is displaying its month legacy production decline. This is how much oil production the Bakken is losing each month. I took these figures and calculated how much oil production the Bakken was losing each year.
In 2011, the Bakken only lost 307,000 bd, but this decline rate surged more than double to 633,000 bd in 2016. Which means, the Bakken lost 633,000 barrels per day of oil last year. Even though the Bakken added 326,000 bd of new production in 2016, its overall production continued to decline.
The same huge declines also took place in the Eagle Ford shale oil field in Texas:
The Eagle Ford oil production peaked in March 2015 at 1.71 mbd and is currently down 33% to 1.14 mbd. You will also notice the the Eagle Ford suffered an annual oil production decline of 1,174,000 bd in 2016. Which is also why the Eagle Ford oil production continued to decline in 2016. The drillers didn’t add enough new oil production to offset the huge declines.