The U.S. may achieve energy independence this decade because of growing North American oil production from shale formations, according to Citigroup Inc.
U.S. shale oil output will grow by 2 million barrels a day as California production increases by 1 million and U.S. Gulf of Mexico output gains 2 million barrels, Seth Kleinman, global head of energy strategy at Citigroup Inc. in London, said in a report today. Foreign imports will drop to 3 million barrels a day, according to the forecast.
“U.S. oil production is rising fast, and net imports of oil are falling sharply,” Kleinman said in the report. Net U.S. oil and product imports are about 8 million barrels a day now, he said.
Canadian production is expected to rise by 1.6 million barrels by 2020, according to the report, which cited the Canadian Association of Petroleum Producers.
Between 1 million and 2 million barrels a day of demand may be cut through conservation and shifting transport fuels for heavy- and medium-duty trucks to liquefied and compressed natural gas, according to the report.
“It’s a combination of production growth out of the U.S. midcontinent as well as Western Canada,” said Aakash Doshi, a New York-based strategist for Citigroup and a co-author of the report. “That is coupled with a structural decline for domestic product demand, such as gasoline, in the U.S. That leaves the possibility for the U.S. to be a large net exporter of products and potentially crude, should the government allow it.”