New oil extraction technologies have the US closer to energy independence
US crude oil production is expected to rise by the largest amount on record in 2013, the Energy Information Administration said, and is set to soar by almost a quarter over the next two years.
The EIA, the independent statistical arm of the Department of Energy, said US crude oil production would grow by 900.000 barrels per day (bpd) in 2013 to 7.3 million bpd. The agency's forecast in the monthly Short-Term Energy Outlook is 300.000 bpd higher than its estimate in December.
While the rate of increase is seen slowing slightly in 2014 to 600.000 bpd, the total jump in US oil production to 7.9 million bpd would be up 23% from the 6.4 million bpd pumped domestically in 2012.
The rapid increase underscores how improvements in horizontal drilling and hydraulic fracturing technology -- commonly referred to as 'fracking' -- have transformed the United States energy market in the last five years, allowing producers to tap shale oil from tight rock formations.
The latest forecast from the EIA is the first to include 2014.
If the agency's projections prove accurate, US crude oil production will have risen by a massive 40% between 2011 and 2014. It will be almost 50% higher than at the beginning of the decade, bolstering the argument of those who say North America could be energy independent by the end of the decade.
Adam Sieminski, administrator of the EIA said that as output in North Dakota's Bakken formation and Texas's Eagle Ford fields has risen sharply over the past 12 months.
The learning curve in the Bakken and Eagle Ford fields, which is where the biggest part of this increase is coming from, has been pretty steep, Sieminski said.
While he cautioned that the long-term outlook beyond 2020 suggested production from shale fields in the United States may plateau, he said it was possible analysts were still underestimating the potential of US shale oil output in the short-term.
The EIA said in the forecast that the rise in US output would contribute to a well supplied market over the next two years. The agency said that international Brent crude oil prices would fall slightly in 2013 to around 105 dollars a barrel on average from just under 112 last year, before falling to 99 a barrel in 2014.