The Deepwater Horizon disaster could be addressed almost prismatically as there’s no shortage of issues to pursue. But today we’ll get started with just some simple facts surrounding oil production in the Gulf. By now, you will have probably learned that without Gulf of Mexico (GOM) production the US’s woeful oil balance would tip even further into the red. I’ll deal with some broader issues of this spill as the week goes on, but first let’s look at annual production data from GOM.
Annual production peaked in 2003 at an average of 1.559 mbpd (million barrels per day). You can anticipate already that, given hurricanes, the monthly data for GOM production will be much more volatile. And while that is certainly true, it’s important to not regard hurricanes as events that artificially depress the production capability that geology would otherwise provide. Why? Because as the quip might go: In the Gulf of Mexico…bad weather is not a bug. It’s a feature. With these cautionaries out of the way, let’s look at the monthly production data–which also uses mbpd.
Ah-hah! I hear you say. GOM has not peaked! And in terms of monthly production, that would be true. December 2009 for example hit a new high of 1.715 mbpd. However, for full year 2009 (not shown on the above chart) the annual average comes in at 1.539 mbpd. Admittedly pretty close to the 2003 high of 1.559 mbpd.
So, why the big jump in GOM production in 2009? Well, because of the previous rollout of deepwater drilling projects like Horizon (remember, Horizon was a drilling project–not a production project). Only through deepwater drilling can the industry keep creating productive wells for the big production rigs like Thunderhorse and Tahiti. In 2009, both Thunderhorse and Tahiti were ready to produce again, as previewed in the March 2009 EIA’s Short Term Energy Outlook (STEO). | see: pages 3-4 in the STEO PDF. Thus 2009 GOM production rose.
A bell tolls for GOM because should there be a halt to all new deepwater drilling, future projects will not come online. Accordingly, the natural decline rate for US oil production–at work since the early 1970’s–will once again make itself known. I suppose it’s sort of fitting that 2009 was the first year in many(since 1991) when US oil production actually rose (by a little). Some of that was from the Bakken formation in North Dakota. | see: North Dakota 4. But the majority of the increase (net of declines) came from the Gulf.
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