EIA upstream analyst talks tight oil projections

By Staff | February 22, 2017

Troy Cook, senior global upstream analyst (and petroleum engineer by training) for the U.S. Energy Information Administration, talks about his team’s work on U.S. tight oil projections, factors that impact production and the role of tight oil production in America’s (or the world’s) future. 

Cook’s team recently released an EIA projection showing that by 2040, tight oil will make up most of U.S. production increases. 

How can tight oil producers continue to increase production without an increase in oil price? 

The application of two existing older technologies, horizontal drilling and hydraulic fracturing, combined with the higher prices within the past decade, made the experimentation and then full scale application of these technologies possible. In the future, cost reductions based on learning by doing and optimization of both drilling and completion practices will continue to allow development in the current lower cost environment that this development helped create.  

What is the significance, if any, of tight oil making up most of U.S. production increases through 2040? 

I believe that the idea of a previously known but generally discounted resource (in terms of its value) could spring to life, and at such high volumes in such a short period of time, is certainly significant. The proven reality of light/tight oil, and available resources of the same type not yet exploited, has been substantial enough to alter expectations of future US oil production from all those doing these kinds of projections. So again, quite significant, because it has proven that it cannot be ignored by those who do this kind of work. 

How would you describe the state/health of the tight oil production world right now? 

The E&P companies, and drilling activity in particular, were obviously affected by the drop in prices, but in general appear to have held up to lower prices better than was initially expected.