U.S. oil production could reach never-before-seen heights by the end of President Donald Trump’s second year in office, according to the Department of Energy’s statistical arm.
The Energy Information Administration (EIA) “expects crude oil production to reach an average of 9.9 million b/d, which would surpass the previous record of 9.6 million b/d set in 1970.”
Most of the increase in production would come from Texas hydraulic fracturing operations and offshore rigs in the Gulf of Mexico, according to EIA.
EIA forecasts that most of the growth in U.S. crude oil production through the end of 2018 will come from tight rock formations within the Permian region in Texas and from the Federal Gulf of Mexico.
In fact, Texas’s Permian Basin alone is expected to churn out nearly one-third of U.S. oil production by 2018. Permian production is expected to increase even if oil prices remain below $50 a barrel.
Permian production is expected to average 2.9 million barrels per day of crude oil by the end of 2018, EIA reported Tuesday. Gulf of Mexico oil production could average 1.9 million barrels per day in 2018 after several major operations come online.
EIA’s projection is somewhat conservative compared to one put forward by analysts at Rystad Energy in June. Rystad predicts U.S. crude oil output could top an old record set in November 1970 by the end of 2017.
EIA’s projection is good news for Trump’s “energy dominance” agenda. The administration has put forward policies to boost oil production on federal lands, while also rolling back regulations on oil and gas drilling.
Interior Secretary Ryan Zinke ordered his agency to replace the Obama administration’s five-year offshore drilling plan with one that opens more areas to energy development. Zinke is also working to reduce permitting times from more than 100 days to about 30 days.
The Department of the Interior proposed repealing regulations for fracking on public lands Monday.
The department said the fracking rules “unnecessarily burdens industry with compliance costs and information requirements that are duplicative of regulatory programs of many states and some tribes.”
Environmentalists are expected to sue the Trump administration to keep the fracking rule in place. The fracking rules never actually went into effect because they have been held up in court since 2015.
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