The EIA’s latest long-term forecast for US energy is out, complete with a new online tool for browsing its data.
Interestingly, under its ‘reference case’ scenario, shale oil production would rise, predominantly in the US — albeit to a small 400,000 barrels per day — by 2035, thanks to higher oil prices. Coal-to-liquids and biofuels would also increase significantly:
However shale oil production levels would not change significantly between the ‘reference’ ($133/barrel) scenario and the ‘high oil price’ ($210/barrel) scenario.
The EIA also forecasts, predictably enough, that total unconventional oil production rises with the price. But one type of unconventional oil — ‘extra-heavy oil’ — production actually falls as the price rises.
Why is that?
The EIA writes that Canadian oil sands show classic price sensitivity because the fiscal regime and extraction costs stay relatively steady regardless of the oil price. However Venezuela - the key producer of extra-heavy oil - is a different story:
Production of Venezuela’s extra-heavy oil depends more on the prevailing investment environment and the assumed government-imposed levels of economic access to resources in the different price cases. In the Low Oil Price case, with more foreign investment in extra heavy oil, production in 2035 climbs to nearly 3.4 million barrels per day. In the Reference and High Oil Price cases, with growing investment restrictions, extra-heavy oil production is limited to 1.3 and 0.8 million barrels per day, respectively, in 2035.