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Annual Energy Outlook 2022

Release Date: March 3, 2022 Next Release Date: March 16, 2023 AEO NarrativePDF
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Driven by rising prices, U.S. crude oil production in the Reference case returns to pre-pandemic levels in 2023 and stabilizes over the long term

Projected U.S. crude oil production in the Reference case peaks in the late 2020s and remains near that peak through 2050

During 2021, crude oil production did not grow, even as benchmark prices increased substantially. However, as the global economy returns to pre-pandemic levels, we project that both demand and prices will remain elevated, resulting in crude oil production reaching pre-pandemic levels in the medium term.

Figure 26.

Figure 26

In the AEO2022, crude oil prices primarily drive drilling activity and crude oil production. In the Reference case, crude oil production returns to pre-pandemic levels in 2023 and peaks in the late 2020s. Production then remains relatively flat through 2050. The Reference case projects that prices are high enough to maintain investment at steady crude oil production levels but not high enough to elicit increasing volumes from those levels of investment. The production path involves many factors, including the amount of investment, technology change, costs of operations, and quality of resource geology.

The side cases illustrate how crude oil production responds to changing market conditions. Our analysis indicates that higher prices, such as those found in the High Oil Price case, projects more production, while the Low Oil Price case projects less production. In the High Oil and Gas Supply case, crude oil production increases by up to 40% from the Reference case, while in the Low Oil and Gas Supply case, crude oil production is almost 47% lower in 2050.

Figure 27.

Figure 27

The majority of new U.S. crude oil production comes from tight oil resources. The Wolfcamp play in the Permian Basin (Southwest region) and the Bakken play in the Williston Basin (Northern Great Plains region) lead the growth in U.S. tight oil production. However, estimates of technically recoverable tight or shale crude oil resources are uncertain. The high and low price cases demonstrate the sensitivity of crude oil production to higher and lower oil prices, including tight oil. In the High Oil Price case, high crude oil prices improve the economics of drilling particularly in tight oil formations, resulting in generally increasing domestic production through most of the projection period before declining as drilling moves to less productive areas. The Low Oil Price case results in generally decreasing U.S. crude oil production because of the lack of economic incentive for producers to drill.

U.S. crude oil net imports remain relatively flat over the long run

Although U.S. crude oil production and refinery throughput was less in 2021 than in 2019, crude oil exports have mostly increased in response to growing international demand. Throughout the projection period, from 2021 through 2050, crude oil exports remain near their projected peak, and they remain fairly stable in both gross terms and as a percentage of total domestic crude oil production, according to the Reference case. Projected crude oil imports, meanwhile, rise to pre-pandemic levels by 2023 in the Reference case, and then they remain relatively flat through 2050. We project that the United States will remain a net exporter of petroleum products through 2050 as net petroleum product exports remain mostly flat through the projection period.

Figure 28.

Figure 28
  • Figure data

  • Production figure data
  • Note: You can access chart data by right-clicking the chart in the PPT file.

The U.S. will remain a net exporter of petroleum products through 2050.