The US will soon become the world's number one oil producer, Goldman Sachs said. US crude oil production should reach 10.9 million bpd by year 2017, a 33 percent higher than 8.3 million barrels currently, the report said. Russia, currently the top crude oil producer, should see production increase only 100,000 barrels in the same period, for an output of 10.7 million bpd, the report noted. The investment bank said in the report that Russia would not increase its current production of 10.7 mbpd by more than 100,000 bopd by 2017. According to the Energy Information Agency (EIA), daily US production in June 2011 was 5.6 mbpd. I assume that GS incorrectly included natural gas liquids (NGL) and liquefied refinery gases (LRG) as oil, but that only gets us to 7.8 mbpd. It is possible that GS also included, even more incorrectly, some fraction of biofuels as oil to arrive at 8.3 mbpd. NGL and LRG are not crude oil. These result from processing impurities and various non-methane hydrocarbons and fluids to produce what is known as 'pipeline quality' dry natural gas. These liquids and liquefied gases include ethane, propane, butane, pentane, and certain condensates that do not naturally separate from crude oil. They contain approximately 60-70 percent of the heating content of oil so a barrel of NGL/LRG is not comparable to a barrel of oil. In fact, ethane, the largest component of NGL, is not even a fuel and is used primarily to make plastic. US crude oil production growth will come principally from the Bakken Shale in North Dakota and Montana, and from the resource plays of the Permian basin in West Texas and New Mexico. Bakken-Three Forks production has reached about 400,000 bopd and some believe it could eventually exceed 1 mbpd. Most of the renewed activity in the Permian basin is from shale and low permeability limestone reservoirs. Permian production has increased from a low of 841,000 bpd in 2004 by 100,000 bpd in 2010. Ford production estimates in South Texas are as high as 750,000 bopd of liquids that include both condensate and NGL. Condensate, like NGL, is not crude oil although it can be used as a fuel. While there is great enthusiasm and hope for the Eagle Ford Shale, it is a very new play and there is insufficient production history in the liquid portion of the play to confidently estimate reserves. It seems highly speculative to extrapolate from current rates of about 14,000 to 750,000 bpd by 2015.
