This is GREAT plan for US energy independence ... let's frack away what's likely to be the last US mini-boomlet of oil, the last of our birthright, which is gonna be sustainable for MAYBE another 5-10 years max, then we'll be back HARD into the terminal production decline we WERE in for almost 40 years (until fracking tech happened) ... and on top of that ... LET'S SELL IT OFF TO THE REST OF THE WORLD ... AND GET THIS?!? Let's do it WHEN WORLDS OIL PRICES ARE REALLY LOW!

This plan is f***ing genius if I understand it correctly.

we can do THIS to our farmlands! It'll be GREAT!

First... while oil markets inevitably fluctuate, it's hard to call this a "mini-boomlet" (nor any reason to believe that it's the last one). The "boomlets" were production increases of hundreds of thousands to perhaps as much as a million bpd. The last decade has seen an increase from around 5 million bpd to the just-reported 12 million bpd level. All of the malthusian predictions that the "the best spots are already taken", "decline rates are too high to sustain" hoping that the "terminal production decline" was merely delayed for a few years have been proven dead wrong. We'll hopefully run out of the need/will to burn the stuff before we worry about terminal declines.

Second... while climbing US production has driven down global prices (largely by reducing US demand for imports), it's actually a glut in the US that has driven WTI down even farther (almost hitting $40 late last year). Exports simultaneously boost prices domestically ($57 the last time I looked) AND putting downward pressure on global prices which have caused OPEC/Russie/etc. to restrain their production growth to prop up prices. So those exports are propping up prices (for US producers)... they aren't "selling low".

it's Bakken and Eagle Ridge, correct me if I'm wrong. IOW, it's not about a lot more spots, it's about a new tech exploiting tight shale plays in a few voluminous areas. You may call it 'dead wrong' but from what I've read the wells don't sustain all that long, and it's not across nearly as wide an area as we had in the 1920's-60's.

IMHO, this 'boom' if you don't want to call it a 'boomlet' ... could peter out pretty abruptly. Maybe, maybe not. Neither of us knows. You don't know these malthusian predictions are 'dead wrong'.

However, and point being, prices aren't that high, and if the boom doesn't last, we've f*cked ourselves by exporting our birthright, esp. at a time when our very action of doing so is forcing down world prices. Shouldn't have boosted production to these levels, IMHO, esp. considering how much of an unknown it is how sustainable these shale plays will be.

BTW, isn't 12M/bbd about where the US was in 1970? And isn't that ABOUT what we consume in the US per day? Doesn't that amount put us right around 0% need to import? So why are we exporting?

To answer your questions, the United States produced an average of 9.7 million barrels per day in 1970 and currently consumes around 20 million barrels per day. As to why we export, it is because not all oil is created equal. Different refineries are configured to handle different types of oil. Oil is classified as to how heavy it is (how long the hydrocarbon chains are) as well as to how sweet it is (how much sulfur it contains). Canadian tar sands are considered heavy and fracked oils are usually pretty light for example. If you own a refinery designed to produce a certain percentage of your outputs as lubricants and asphalt, there is an upper limit on how much light crude you can use without idling the equipment used to handle those heavier oils. Letting equipment idle that you spent hundreds of millions of dollars on is generally poor business practice.

The only thing that I would add to Massacure's response is that our infrastructure hasn't adapted to the new reality yet. We're still set up to import large quantities of crude oil to comparatively few locations... refine it... and then distribute the end products all around the country. We haven't built the transport capacity to support the new reality that so many millions of barrels are produced in the Bakken (for example) and need to get to refining capacity. The infrastructure wasn't designed to flow in that direction. The same thing applies to our export capacity.

So the short answer is that it can be most efficient to export from some areas (or at some grades as Massacure noted) while simultaneously importing others. If Venezuela ever gets their act together and starts producing again, we could still see millions of barrels exported to the US because we have the refineries that can handle their sour/heavy crude. We won't need it... we'll just be able to profit from refining it more than others.

But back to your questions:

Mostly it's Bakken and Eagle Ridge, correct me if I'm wrong.

They're huge, but the Permian is larger than both of them combined. Anadarko and Niobrara each produce several hundred thousand bpd. Those last two are constrained by how much they can transport. The Permian benefits from being close to easy export capacity so it will continue to grow (current expectations expect that basin alone to hit over five million bpd in the next three years or so. What's important to note is that there isn't any reason to believe that we're anywhere near exhausting the list.

from what I've read the wells don't sustain all that long

That was part of the original claim. Their depletion rates are too high and within a couple years they're hardly producing anything. Combined with the fact that they've already drilled the best spots, it's all going to dry up any day now. Costs are too high and returns are too low. The only way to keep production even this high is by operating more and more rigs because you have to replace the wells that are no longer producing.

All of that turned out to be wrong. The technology continued to advance and the wells are much more productive than assumed (and at cheaper prices).

it's not across nearly as wide an area as we had in the 1920's-60's.

I wouldn't say so. For those years production was largely limited to TX/CA/OK. Current and future shale plays are spread all over the country


You don't know these malthusian predictions are 'dead wrong'.

Sure I do. The great thing about malthusians is that they make predictions with hard dates... and they have a habit of picking dates that are fairly close to the present. All you have to do is wait a few years to learn that they are consistently wrong.

For example - one of my favorite debates from about a dozen years ago was with disciples of Matt Simmons on the OilDrum site. Just a couple years before he died he said:

and posters right here on DU used to argue with me that we already "knew" that peak natural gas had already arrived in the US.

When he made that claim the prior US peak in NatGas production was about 23 Trillion cubic feet per day back in the early 70s... and it had declined to just under 19 trillion as he spoke.

Yet here we are. The Appalachian shales alone produce over 30 trillion... While total US production is now at 78 Trillion.

Yes... we can say with absolute certainty that they were dead wrong.

However, and point being, prices aren't that high

Sure they are. WTI is higher than it has been for all but ~15 years of history (most of which were from OPEC artificially constraining production to keep prices artificially high). Their ability to do that is slipping away and might not return this time.