EIA: OIL $150/BARREL
Crude oil would cost at least $150 a barrel due to supply disruptions in the Middle East and North Africa were it not for rising production in North Dakota and Texas, U.S. Energy Information Administration (EIA) chief Adam Sieminski said in an interview on Wednesday.
Oil output from the oil-rich Bakken, Permian and Eagle Ford shale formations in those two states, as well as other smaller formations around the nation, has spiked in the past decade to more than 4 million barrels per day.
That new oil has helped the United States weather supply disruptions from Libya, Iraq and other one-time major oil producers in which political and military turmoil has sharply depressed production, Sieminski said ahead of the North Dakota Petroleum Council's annual meeting.
"If we did not have the growth in North Dakota, in the Eagle Ford and the Permian, oil could be $150 (per barrel)," Sieminski said. "There is a long list of countries with petroleum outages that add up to about 3 million barrels per day."
Sieminski was appointed EIA administrator by President Barack Obama in 2012. His visit to the petroleum council's annual meeting, his first time in North Dakota, comes as Hess Corp and other major oil producers invest billions in the state to extract and process crude and natural gas from the Bakken shale formation.
Alongside the energy companies, commercial and residential investors have plowed billions into new apartments, grocery stores and other projects around the western part of the state, fueling economic growth and creating jobs.
While some have questioned whether North Dakota's oil boom will continue or peter out, as similar oil booms did in the 1950s and 1980s, Sieminski said he expects production to continue and could eventually hit 2 million barrels per day.
North Dakota's oil production was 1.1 million barrels per day in July, according to data released earlier this month by state regulators.
"Our current modeling shows production in the Bakken continuing to climb, and then peak off," Sieminski said. "But the technology still seems to be in the early stages. Modeling changes in technology seems to be the hardest thing to do."
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