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January 16, 2014Crude oil extraction in federal Gulf of Mexico waters should increase by 25 percent over the next two years, according to Energy Information Administration’s first short-term outlook of 2015.
Outer Continental Shelf Gulf production averaged 1.27 million barrels per day last year and is anticipated to reach 1.59 million bbl/d in 2015, the report says. That level that would push extraction beyond the previous yearly high of 1.56 million bbl/d – three times, in 2009, 2003 and 2002 – according to historical data.
Cited for the driving the increase are 18 pending projects for 2014-15 – including the Jack-St. Malo project in the western Gulf that Chevron has said will yield 170,000 bbl/d.
Port Fourchon, which lays claim to 90 percent of service activities in the deep-water Gulf, has expanded at a rapid pace as optimistic forecasts have spurred activity and loosened purse strings.
The port in October broke ground on $15.7-million project to create 2,600 linear feet of bulkhead for Slip C, the most expensive project undertaken by the port commission, according to Chett Chiasson, the port’s executive director. With Slip C filling up eight years ahead of schedule, the commission has also begun the permitting and planning phase for Slip D.
Increased Gulf production will contribute to a national rise in liquid oil production from 7.5 million bbl/d last year to a projected 9.3 million bbl/d in 2015, according to the EIA report. The highest annual average U.S. production level was 9.6 million bbl/d in 1970.
Also anticipated to aid the domestic boost are shale formations, particularly those in west Texas and New Mexico. The agency said hydraulic fracturing would unlock more resources in that area.
“EIA forecasts production in the Permian Basin, which averaged 1.32 million bbl/d in 2013, to grow more than any other region in the United States through 2015,” the report says.
According to the projections, U.S. reliance on Gulf-extracted oil would increase slightly. In 2013, production in those waters represented 16.9 percent of domestic extraction; should the estimates hold, that share will climb to 17.1 percent in 2015.
As more crude is pumped domestically, less will be imported from international sources. One-third of U.S. liquid fuel consumption last year was satisfied by foreign oil. In 2015 that ratio should decline to just less than one-fourth, the lowest level since 1970. Foreign reliance on liquid fuels peaked at more than 60 percent in 2005, according to the EIA.
The retail price of gasoline fell from $3.63 on average in 2012 to $3.51 in 2013. The EIA anticipates the price to fall to $3.39 in 2015.
