This--the latest "Party On Dude" message from the media---was discussed on The Oil Drum this morning. An excerpt from the article and my comments follow:
USA Today (quoting Citigroup): U.S. energy independence is no longer just a pipe dream
"It's no pipe dream. The U.S. is already the world's fastest-growing oil and natural gas producer. Counting the output from Canada and Mexico, North America is "the new Middle East," Citigroup analysts declare in a recent report."
Combined net oil exports from the seven major net oil exporters in North & South America, inclusive of rising net oil exports from Canada, recently fell by 1.4 mbpd, declining from 6.2 mbpd in 2004 to 4.8 mbpd in 2010 (BP, total petroleum liquids).
If we extrapolate the 2004 to 2010 rate of change in the combined ratio of consumption to production of total petroleum liquids (C/P) for the seven major net oil exporters in North & South America, they would collectively approach a 100% C/P ratio, and thus zero net oil exports, in about 21 years.
Regarding rising US crude oil production:
The Texas Railroad Commission (RRC) sums the reported production from Texas producers, and it has been doing so far decades, while the EIA apparently uses a sampling approach to estimate Texas production. For annual production in 2011, the RRC shows Texas crude oil production at 1.12 mbpd (million barrels per day), while the EIA shows it at 1.46 mbpd, a gap of 340,000 bpd. The gap between the RRC and the EIA for monthly production is even more pronounced, on the order of about 500,000 to 600,000 bpd.
If the EIA is this far off for Texas, what about the other producing states, and what does it say about the EIA's global data?
The shale promoters are saying that the US is a test case for the world, to-wit, that improved technology has allowed US producers to offset the underlying production decline, and to show a net increase in production. And therefore, we can look forward to rising global production as this technology is applied around the world.
If we use the RRC data for Texas production, instead of the EIA data, it puts US crude oil production at 5.3 mbpd for 2011, which would be no increase over the 5.3 mbpd rate that we saw in 2010.
Based on the Texas RRC data, it appears that a thousand rigs drilling for oil in the US in 2011 served to keep production flat year over year. Note that--based on the RRC data--all of the cumulative expenditures by the US oil industry from 2005 to 2011 inclusive only served to bring US crude oil production back to the 2004 pre-hurricane rate of 5.3 mbpd.
Incidentally, we have also seen sizable discrepancies between the EIA and other data sources for regions like Saudi Arabia, where the EIA's annual 2010 total petroleum liquids production number for Saudi Arabia is 500,000 bpd higher than what BP shows.
Art Berman will be doing a webinar on US Shale Oil plays tomorrow. For more info: http://www.aspousa.org
US crude oil production, 2002 to 2011, EIA data only versus EIA + RRC (substituting RRC data for Texas, instead of EIA):