All energy production booms must fade.
Eventually it becomes too expensive to drill — and there are, after all, a finite amount of resources in the ground.
But as of October 2013, the Great American Shale Boom is showing few signs of losing steam.
The EIA is out with a series documenting well production rates out of the boom’s various epicenters: North Dakota’s Bakken, Pennsylvania’s Marcellus, Colorado’s Niobara and Texas’ Permian, Haynesville, and Eagle Ford plays.
(Here’s the map showing where those all are:)
First, here are the EIA’s conclusions:
- Efficiency gains — meaning firms are learning how to get more resources out of a given well — have been the main drivers of overall growth.
- The Bakken and Eagle Ford account for about 75% of oil production gains among the six regions. Together they increased by 700,000 barrels per day.
- The Marcellus accounts for about 75% of all natgas production growth among the six regions.
Let’s see what this looks like in chart form. In both the Bakken and Eagle Ford, the amount of resources coming out of every new well drilled since about 2011 has gone up. One rig can drill multiple wells.
Here’s the chart for the Bakken…
And the Eagle Ford…
Older or “legacy” Bakken and Eagle Ford wells are seeing steeper production drop-offs, though this may be because oil companies don’t yet feel the need to devote capital to squeezing more out of them.
Meanwhile, in the other regions, decline rates for oil or gas are easing up — which, again, means
It’s possible that declining oil prices — crude dipped below $US100 for the first time since July yesterday — could slow some of this activity.
But the larger point is that there appear to be plenty of resources in the ground at a mostly reasonable price if we need them.