EIA predicts sharp rise in U.S. oil production by 2040

U.S. crude oil production could reach approximately 10 million barrels per day (MMbopd) between 2020 and 2040, the U.S. Energy Information Administration (EIA) reported Friday.

EIA projects in its Annual Energy Outlook 2013 report that U.S. oil production could range from 6 to 8 MMbopd over the next 30 years. However, EIA also developed a higher resource scenario, driven primarily by tight oil production, in which total U.S. liquids fuels production, including crude oil, natural gas liquids (NGL), refinery gains, biofuels and other liquid fuels, rise to over 18 MMbopd in 2040, up from 12 MMbopd in the study's reference case.

This increased domestic production would reduce net imports to 7 percent of less of total demand compared to 40 percent in 2012, EIA noted.

"This increased production results from assumed greater technically recoverable tight oil resources, as well as undiscovered oil resources in Alaska and the offshore Lower 48 states," EIA said in a statement.

The higher case scenario also assumes higher gas-to-liquids production of .6 MMbopd from .2 MMbopd in the Reference case and an increase in NGL production from 2.2 MMbopd to 5 MMbopd in 2040, compared to approximately 3 MMbopd in 2040 in the reference case.

U.S. tight oil production has grown primarily due to exploration and production activity in North Dakota's Bakken play and the Eagle Ford play in South Texas, and has played a significant role in reversing the decline seen in U.S. oil production. The surge in activity in the Bakken and Texas' Eagle Ford and Permian Basin also helped boost the real gross domestic product for North Dakota and Texas in 2012.

Alaska not only has significant conventional but unconventional oil and natural gas resources, Alaska Department of Natural Resources Commissioner Dan Sullivan told Rigzone in February. However, the state has seen a low level of exploration compared with other U.S. states due its lack of cost competitiveness compared with other regions. Alaska's state legislature voted in April to reduce taxes for oil production in an effort to boost oil production in the state, Dow Jones Newswires reported.