Shale Boom! U.S. Now Produces >10% of World's Supply
U.S. tight oil production averaged 3.22 million barrels per day (MMbbl/d) in the fourth quarter of 2013, according to U.S. Energy Information Administration estimates. This level was enough to push overall crude oil production in the United States to an average of 7.84 MMbbl/d, more than 10% of total world production, up from 9% in the fourth quarter of 2012. The United States and Canada are the only major producers of tight oil in the world. In recent years, North American producers have developed technologically advanced drilling and completion processes to produce oil from tight formations.
Tight oil refers to oil found within reservoirs with very low permeability, including but not limited to shale. Permeability is the ability for fluid, such as oil and gas, to move through a rock formation. In February 2014, 63% of U.S. tight oil production came from two basins: the Eagle Ford in South Texas (1.21 MMbbl/d, or 36% of total U.S. tight oil production), and the Bakken Shale in North Dakota and Montana (0.94 MMbbl/d, or 28% of total U.S. tight oil production). Tight oil production in the United States represents 91% of all North American tight oil production, with the remaining 9% coming from Canada.
Canada and Russia were the only countries outside the United States that have produced commercial quantities of crude oil from tight formations:
- In Canada, total tight oil production averaged 0.34 MMbbl/d in 2013, close to 10% of the 3.52 MMbbl/d of total Canadian crude oil production. This production was concentrated entirely in the country's western provinces of Alberta, Manitoba, and Saskatchewan.
- Russia is producing some oil through the use of hydraulic fracturing applied to tight formations, mainly in the West Siberia Basin. The 0.12 MMbbl/d of tight oil produced in Russia in 2013 accounted for 1% of its total oil production.
With industry conditions resembling those of North America, Australia and the United Kingdom have the potential to be among the next countries with commercially viable tight oil production. Outside these two countries, there are many examples of energy companies drilling exploratory wells and committing to large investment plans to develop tight oil formations. Many of these formations are located within basins that already produce conventional crude oil in Mexico, Russia, China, and Argentina. The Argentine national oil company YPF claimed in their third-quarter 2013 report the production of more than 10,000 barrels of oil equivalent per day from Vaca Muerta in the Neuquin Basin, of which 7,887 barrels per day was crude oil.