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Report: US EIA shale oil & gas forecasts highly to extremely optimistic

11 December 2021

A new analysis from earth scientist David Hughes examines the data behind the US Energy Information Administration’s (EIA) latest forecasts for US shale oil and gas output and concludes that the EIA long-term outlook is biased.

The report—Shale Reality Check 2021, written for the Post Carbon Institute—assesses the viability of shale forecasts in the EIA Annual Energy Outlook 2021, which are widely used by policymakers, industry, and investors to make long-term plans. The detailed analysis finds that the EIA’s forecasts of tight oil and shale gas production through 2050 are “highly to extremely optimistic” and therefore unlikely to be realized.

In its 2021 outlook, the EIA predicted that tight oil production would increase by 12% through 2050, while shale gas output would increase by 27%. In the agency’s view, the US fracking boom is poised to continue for decades to come. In his report, Hughes rigorously examined the EIA’s forecasts, comparing the agency’s assumptions against the real-world drilling and production data that showed faltering productivity and fast declines from many shale wells.

Most oil and gas plays are already past peak, according to the report. Of the 13 major plays, Hughes rates the EIA’s production forecast for three as “extremely optimistic,” five as “highly optimistic,” and five as “moderately optimistic.”

Some of the key findings of the report are:

David Hughes warns about the implications of his findings for the US energy policy: “The ‘shale revolution’ has provided a reprieve from what just 15 years ago was thought to be a terminal decline in US oil and gas production. This reprieve, however, is likely temporary, and the US would be well advised to plan for much-reduced shale oil and gas production in the long term based on play fundamentals, even without considering the need to reduce greenhouse gas emissions. New US policies aimed at reducing greenhouse gas emissions in 2030 by 50-52% from 2005 levels will very likely further constrain US tight oil and shale gas production.

Source: Post Carbon Institute