Proceedings Of The Marine

FALL 2015

Proceedings magazine is a communication tool for the Coast Guard's Marine Safety & Security Council. Each quarterly magazine focuses on a specific theme of interest to the marine industry.

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6 Proceedings Fall 2015 Production Increases The U.S. and Canada are the only major producers of tight oil in the world, and most U.S. tight oil is produced from deposits in Texas and North Dakota. According to the U.S. Energy Information Administration (EIA), U.S. tight oil pro- duction averaged 3.22 million barrels per day (MMbbl/d) in the fourth quarter of 2013. This was enough to push over- all crude oil production in the U.S. to an average of 7.84 MMbbl/d, or more than 10 percent of total world produc- tion. Overall, domestic daily output between 2008 and 2013 grew by 50 percent. By 2016, the U.S. could be pumping more than 9 million bar- rels daily, a level not seen since the early 1970s. According to the EIA, the U.S. will surpass both Russia and Saudi Ara- bia in oil production sometime in 2015. Domestic crude oil production is expected to level off and then slowly decline after 2020. Energy Information Administration statistics also show a similar story for natural gas, as production from shale gas wells has increased steadily over the last decade. For example, in 2001, shale gas was only about 2 percent of total domestic natural gas production; over the past decade, U.S. shale gas pro- duction has increased more than twelvefold, and now accounts for about 27 billion cubic feet per day (bcfd) or 40 percent of total production. The U.S. is now the world's largest natural gas producer, according to EIA, and is poised to become a net natural gas exporter by 2018. Transportation Impact This domestic oil and gas production renaissance presents challenges for the U.S. transportation sec- tor. Pipelines have long been seen as the "preferred" method to move crude oil and other petroleum liq- uids, and they continue to transport substantially America's abundant unconventional oil and natural gas (UOG) resources, consisting primarily of natural gas and oil contained in "tight" geological formations with low per- meability, have become vital components of our nation's energy portfolio. 1 As recently as a decade ago, there were widespread predictions the U.S. was running out of recover- able oil, that it was moving toward becoming a net importer of natural gas, and that it would have to depend primarily on coal to generate much of the nation's electricity for the foreseeable future. Since then, the successful introduction and widespread implementation of innovative hydraulic fracturing and hori- zontal drilling techniques have made it economically pos- sible to reach once hard-to-get UOG resources. 2 The result has been a renaissance or "rebirth" in U.S. crude oil and natural gas production. The Energy Renaissance New U.S. energy reserves create a new oil and gas paradigm. by Mr. rick Elliott Director, Advanced Supply and Facilities Division U.S. Department of Energy New Energy and Its Maritime Impacts For petroleum and other liquid fuels, major increases in oil production are apparent in this chart prepared by the U.S. Energy Information Administra- tion (EIA). EIA, AEO2014 Early Release Overview, December 2013. U.S. Petroleum and Other Liquid Fuels Supply by Source

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