Oil production from North American shale fields will outpace every member of OPEC except Saudi Arabia within two years, according to Exxon Mobil Corp., the world’s biggest energy company by market value.
Globally, crude output from shale and similar rock formations that require intensive drilling techniques will increase 11-fold by the end of 2040, led by explorers in the U.S., Canada and Russia, Exxon said today in its annual long-term forecast for global energy.
Burgeoning U.S. production in shale hotspots such as North Dakota and Texas will soon overwhelm the capacity of domestic refineries and prompt the federal government to reconsider its restrictions on crude exports, said Kenneth Cohen, the vice president who oversees Exxon’s lobbying efforts. The Irving, Texas-based company favors lifting the export limits, which date to the 1970s period of Middle East oil embargoes that triggered gasoline shortages.
“The reality is the market has moved from an era of scarcity to an era of abundance -- but we’re still saddled with statutes and regulations stuck in a mindset of scarcity,” Cohen said in a telephone interview. “The principle of free trade should underpin not just blueberries and corn, but energy products as well.”
The report, assembled by a team of Exxon economists, scientists and engineers, also estimates that carbon dioxide emissions from energy-related sources will peak worldwide around 2030 before beginning a gradual decline. The reduction will stem from increased use of more efficient generators and engines and reduced use of the most carbon-intensive fuels, such as coal and wood, according to the report.
Crude extracted from beneath the oceans will expand 150 percent by 2040, with production from oil-sands deposits quadrupling in that period, said Exxon, which used a base year of 2010 in its calculations. Shale, deep-water and oil-sands output together will be more than enough to replace declining supplies from older, onshore fields that were drilled decades ago, the report said.
U.S. crude production climbed a record 18 percent in the past year to a 25-year high of 8.075 million barrels a day in the week ended Dec. 6, the Energy Information Administration said yesterday. The boom has reduced domestic demand for foreign oil and spurred an increase in overseas sales of oil-based fuels such as diesel, which aren’t subject to the same export restrictions as crude.
U.S. oil output has surged after explorers adapted horizontal drilling and hydraulic fracturing techniques originally deployed to extract natural gas from shale in north Texas. Domestic crude production will average 8.54 million barrels a day next year, according to the EIA, the statistical arm of the U.S. Energy Department in Washington.
Even with competition from North American shale sources, the Organization of Petroleum Exporting Countries will increase its share of the world oil market to 45 percent by 2040 from about 40 percent in 2010, according to Exxon’s report.
Exxon, which traces its roots to the 1880s and John D. Rockefeller’s Standard Oil Trust, compiles the estimate each year to guide long-term investment decisions.
(Exxon has scheduled a webcast on the outlook at 10 a.m. New York time, accessible at www.exxonmobil.com/energyoutlookwebcast.)