Further policies needed to support the rapid rise in US oil production
The rise in US crude oil production seems to be continuing despite a recent slowdown in the momentum regarding the rise of oil prices. The US Energy Information Administration (EIA) has suggested that US crude oil production exceeded 10 million barrels a day, an increase of approximately 100,000 barrels a day from the end of last year.
The EIA has forecasted the average crude oil production to continue increasing to over 11 million by 2019, exceeding the previous record set in 1970 which was 9.6 million barrels a day and potentially surpassing the crude oil figures set in Russia and Saudi Arabia.
Data has suggested that the rise of US crude oil has increased quickly than forecast by the EIA Energy modeling system due to rapid developments in technology and overall efficiency. Crude oil production in the US is exceeding all expectations of leading global energy forecasting models. The US has now solidified itself as the global swing oil producer and now has a significant influence on global prices changes.
In order to continue this momentum, energy experts in the US are stressing the need to continue with the development of pro-energy development policies that will support the shale industry. Whilst the shale boom has had great economic benefits and spurred employment growth, it does not consist of the same level of security benefits. Since the growth of the shale revolution, US oil imports from OPEC have reduced by nearly 50%. With US crude oil export opening up in 2015, the export market has surged dramatically in China, dramatically influencing the global oil industry.
Crude oil exports have exceeded 2 million barrels a day in recent months, a figure that is over 30 times higher than five years ago. Despite the rapid growth, experts believe further pro-oil policies are required. With less reliance on other nations to meet the energy needs in the US means that to an extent other areas are becoming more dependent. Industry experts cite how Europe has considerably low energy security rankings because of heavy reliance on more politically risky suppliers.
The Annual Energy Outlook for 2018 by the EIA suggests the US oil production will continue to increase by over 0.5% each year. The outlook also suggests how the offshore industry may potentially become more significant. Over 90% of offshore regions currently off limits to oil exploration, however, Trump has made substantial plans for accessibility. At present, offshore regions contribute around 15% towards total US crude oil production, but experts suggest the potential offshore is considerably higher, emphasising how offshore discoveries tend to be significantly larger than onshore fields.
There is, however, a range of regional support towards the oil industry. California, in particular, has made it quite clear it opposes development of the oil industry and other places such as New York are quite against the opening up of offshore exploration. Oil industry supporters in the US believe it a clear path is needed to allow developers to progress and highlight that the US is a notable nation of large investments into delivering oil. Further policies to support the oil industry are necessary to continue the momentum forward.
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