U.S. to surpass Saudi Arabia in oil production by 2020?

Yes.  That’s the forecast from the International Energy Administration.

Their report has been discussed in lots of places this week.

I’ll make note of their long-term forecast for future reference:  U.S. oil production greater than Saudi Arabia by 2020.  That’s only 8 years from now.

Mark Mills discusses some of the impacts of surging production in the U.S. in his post The International Energy Agency Catches Up With America’s Oil Producers.

The IEA report is taking note of the rapid increase in places like Bakken and Eagle Ford. Their forecast, as already mentioned, is for U.S. output to surpass that of Saudi Arabia. That has huge implication for jobs and the economy.  There are huge ripple effect into manufacturing. That production increase will impact geopolitics as well.

Ironically, there are huge implications for government tax revenue. North Dakota isn’t quite sure what to do with their surplus at the state government level.  That is a great problem to have.  I wish the leaders in my state government were paying attention.

I’ve pointed out, as have many others, that we don’t have to continue down this road.

Mr. Mills says:

As the Wall Street Journal and others have noted, our good fortune isn’t inevitable. The U.S. could choose to follow the energy model of Mexico — vast resources, but declining production because of the heavy hand of government.

What would happen if the federal government were to actually encourage energy development?

At a price of €120 for the PDF version, I don’t think I’ll be reading the report anytime soon. If you’re really interested, the report can be found here.

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