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State of the oil and gas industry is good

Hydrocarbon Engineering,

According to the Deloitte 2014 Oil & Gas Survey, industry professionals believe that the overall state of the industry is good. Six in ten oil and gas professionals now feel the US energy situation is headed in the right direction, up from just over four in ten in 2012

  • As a result of the shale revolution, over the past five years US oil production has boomed from 5.4 million bpd in 2009 to 8.6 million bpd at present.
  • The result in natural gas production has also been remarkable, soaring from 59.3 billion ft3/d in 2009 to over 75 billion ft3/d today.
  • Current US Energy Information Administration (EIA) projections are that the US is on track to produce over 9.5 million bpd of crude by 2016, nearing the US’ previous peak production of 10 million bpd in 1971.

US energy security

  • According to Deloitte, an important measure of the success of the shale revolution is its potential to increase US energy security, which is defined as the ability of US households and businesses to accommodate supply disruptions in the energy market.
  • While domestic prices will always be subject to the price volatility of international energy markets, increased domestic production can provide an important cushion against large price swings.
  • In just two years, the share of respondents who believe the US has achieved energy security jumped from a skeptical 12% to nearly 40%.

Natural gas self sufficiency

  • One of the driving factors behind increased optimism for energy security is rising US self sufficiency in oil and gas production, which not only reduces dependence on imports, but has the US poised to reclaim its former position as an important exporting country.
  • Less than half of industry respondents now believe that the US will never achieve self sufficiency in its oil supply, nearly 10% fewer than two years ago.
  • In the natural gas market, 59% of respondents believe the US has or will soon achieve natural gas self sufficiency.

Natural gas supply

  • 90% of respondents believe that rising domestic production will be able to provide enough affordable natural gas supply to new demand sources such as power generation, the chemicals industry, manufacturing sector, a growing number of natural gas powered vehicles, as well as export markets.
  • Indicative of strong US gas production capabilities, over the past summer, the US natural gas industry had a record breaking gas injection season that raised US working natural gas in underground storage a staggering 2734 billion ft3.

Adapted from a report by Emma McAleavey.

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