The Global Economy is heading for serious trouble when the disintegration of the U.S. Shale Oil Industry begins, likely within the next few years. With Global GDP growth based on world oil production growth, the main driver has been the U.S. shale oil industry. This is terrible news because the top U.S. shale oil fields are declining ten times the rate as are the world’s mature oil fields.
According to the IEA, the International Energy Agency’s 2018 Executive Summary:
Natural production declines are slowing, but more investment will be needed. Each year the world needs to replace 3 mb/d of supply lost from mature fields while also meeting robust demand growth.
I have seen higher estimates of 4-4.5 million barrels per day of annual production declines from the world’s mature oil fields. Either way, annual oil production declines from the world’s mature oil fields is a tenth of the rate from the top four U.S. shale oil fields.
If we look at the data taken from Shaleprofile.com, the top 4 U.S. shale oil fields (Permian, Bakken, Eagle Ford & Niobrara), 2018 production reached 6.6 (mbd) million barrels per day by December and then declined to 3.7 mbd by October 2019:
The top 4 U.S. shale oil fields experienced a 44% decline rate from Dec 2018 to Oct 2019… and this isn’t for the entire year. It will take another month or so before Shaleprofile.com releases the total production figures up until December 2019. Thus, the total-year decline rate may be closer to 46-48%.
If we assume a conservative 45% decline rate from these top U.S. shale oil fields and compare it to the average decline rate from the world’s mature fields, here is the result:
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