REPOST: U.S. oil and gas reserves up by a third, new report says

A new data says U.S. oil and gas reserves are up by about a third due to hydraulic fracturing. Neela Banerjee of Los Angeles Times has the story.

Image Source: latimes.com

WASHINGTON -- Reserves of oil and gas that can be developed using current technology are 35% greater in 2013 than in 2011, according to a new report by the Energy Information Administration, the research branch of the Energy Department.

The rise in estimated domestic reserves to 223 billion barrels of oil equivalents, which include crude oil and gas, stems in large part from the inclusion of reserves found in shale formations. Increased use of production methods such as horizontal drilling and hydraulic fracturing, or fracking, have made oil and gas trapped in tight geological formations economically recoverable.

The United States is second to Russia in the amount of technically recoverable barrels of shale oil, at 58 billion. It is fourth among countries with reserves of technically recoverable shale gas reserves, with 665 trillion cubic feet. China has the largest shale gas reserves, 1,115 trillion cubic feet.

The Energy Information Administration said “32% of the total estimated natural gas resources are in shale formations, while 10% of estimated oil resources are in shale or tight formations.”

"Today's report indicates a significant potential for international shale oil and shale gas, though the extent to which technically recoverable shale resources will prove to be economically recoverable is not yet clear," EIA Administrator Adam Sieminski said.

The data bolster predictions that the U.S. will be able to decrease imports of fossil fuels as it ramps up domestic production, including oil in North Dakota and the Eagle Ford formation in Texas and natural gas in the Marcellus shale formation in western Pennsylvania.

But the energy boom has unlocked controversy along with opportunity. Dozens of communities around the country have passed limits on fracking because of concerns about possible air and water pollution and heavy truck traffic.

Fracking involves shooting water laced with chemicals and sand deep underground to shatter rock formations and tap deposits of oil and gas. Many communities have expressed worries that the process could lead to contamination of local water resources with fracking fluid or the migration of methane and other gases and minerals into water supplies.


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REPOST: US oil production 'to jump by a quarter by 2014'

This BBC News article talks about the increase of US oil production in 2014 due to the discovery of vast reserves of shale oil.

Image Source: bbc.co.uk

 

US oil production will jump by a quarter by 2014 to its highest level in 26 years, figures suggest.

This is mainly because of the discovery of vast reserves of shale oil.

The Energy Information Administration (EIA) in the US also forecast average global oil prices would fall from $112 a barrel in 2012 to $99 in 2014.

It said US oil imports would fall by a quarter between 2012 and 2014, because of rising domestic production and the discovery of shale gas.

US oil imports have been falling since 2005, when they stood at 12.5 million barrels a day. By 2014, they will have halved to six million barrels, the EIA said.

Domestic production, which stood at 6.4 million barrels last year, will rise to 7.9 million barrels next year, the highest level since 1988.

"US oil production is rising extraordinarily quickly, entirely because of the application of fracking, [which is] unleashing very significant new resources into the market," Seth Kleinman, global head of energy strategy at Citigroup, told the BBC.

Fracking is the process of blasting water at high pressure into shale rock to release oil or gas held within it. It has become widespread in the US and domestic gas prices have plummeted as a result.

Many have hailed shale gas as the saviour of the US energy market. In fact, the International Energy Agency (IEA) has said it expects the US to overtake Russia as the world's biggest gas producer by 2015 and to become "all but self-sufficient" in its energy needs by about 2035.

But critics of shale gas point to environmental concerns such as high water use and possible water contamination, the release of methane and, to a lesser extent, earth tremors caused by drilling.

The process has been banned in France, while the UK recently lifted a moratorium on drilling for shale gas.

Transformational shift

Shale gas also helps to explain the sharp drop in US oil imports forecast by the EIA in the next two years.

The move away from oil "is being driven by tighter fuel economy mandates and the transformational shift from oil to natural gas, which is extraordinarily cheap compared with oil", says Mr Kleinman.

But the US will continue to increase oil production for domestic use and to generate revenues from exports.

The US will overtake Saudi Arabia as the world's biggest oil producer "by around 2020", an International Energy Agency (IEA) report predicted at the end of last year.

In fact, global oil production will continue rise, thanks to the discovery of shale oil.

"Total oil production is about to rise," Fatih Birol, chief economist at the IEA, told the BBC.

"We estimate total oil production to reach about 100 million barrels a day, about 20 million higher than today.

"This growth comes from unconventional [shale] oil."

The discovery of shale oil means global oil production will not peak in the next 20 years, Mr Birol added.

The increase in oil production comes at a time when coal production is also rising sharply, largely to provide cheap energy to meet exploding demand in developing economies, particularly in Asia.

The increase in production of both coal and oil has raised concerns about meeting carbon dioxide emissions targets, designed to slow the rate of increase in global temperatures.

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