US Rig Count Exploding, Production Not So Much

These two charts from Barclays Capital show a veritable explosion in US rig counts for oil development and oil exploration.

 

This rig count expansion, of some 400 to 500 percent over the last three to four years, underlies the glowing prognostications of a revolution in US domestic energy supply. And domestic supplies are increasing. However, as the following chart from the Energy Information Agency shows, the expected increases over 2010 levels in the following three years (2011-2013) amount to only about 700,000 barrels per day. Given overall US consumption at around 19,000,000 barrels per day, and net petroleum imports of some 8 to 9 million barrels a day, those increases do not seem like the "game changer" so often advertised. That such an enormous increase in rigs employed should lead to so limited an increase in production is striking. 

According to the EIA's March 6, 2012 Short Term Energy Outlook, domestic crude oil production increased by 120,000 barrels a day to 5.6 million barrels a day in 2011. A 390,000 b/d increase in lower-48 onshore production in 2011 was offset by a 40,000 decline in Alaska and a 230,000 b/d decline in the Gulf of Mexico (GOM). Natural gas liquids (NGLs) and biofuels are not included in that tally.


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Source of charts: Walter Kurtz of Sober Look, via Pragmatic Capitalist