Goldman Sachs predicts that U.S. will be world’s largest producer of oil in 2017

The Oil Drum - On Sunday, September 11, 2011, The Sunday Times quoted a Goldman Sachs (GS) report also summarized by Rigzone that predicted the United States will become the world's largest oil-producing country. This astonishing production increase is accomplished by changing the definition of oil and by using optimistic projections of liquids-rich shale production.

...The claim was that U.S. daily production will increase from 8.3 to 10.9 million barrels of oil per day (Mbopd) by 2017. This would surpass Russia and Saudi Arabia according to press reports. While these reports did not mention that Saudi Arabia claims it can produce as much as 12 Mbopd, they did state that Russia would not increase its current production of 10.7 Mbopd by more than 100,000 bopd by 2017. It is curious that the announcement was apparently not carried by any of the major business- or energy-oriented journals (Bloomberg, Wall Street Journal, Oil & Gas Journal, etc.) nor was it featured on the GS website..

...It is unclear how GS arrived at 8.3 Mbopd*. According to the Energy Information Agency (EIA), daily U.S. production in June 2011 was 5.6 Mbopd (Exhibit 1). I assume that GS included natural gas liquids (NGL) and liquefied refinery gases (LRG) as liquids, but that only gets us to 7.8 Mbopd. It is possible that GS also included some fraction of biofuels as oil to arrive at 8.3 Mbopd.

Exhibit 1. U.S. Crude Oil, Natural Gas Liquids, Liquefied Refinery Gases, and Other Liquids Production June, 2011. Data from EIA.

 It seems highly speculative to extrapolate from current rates of about 14,000 to 750,000 bopd by 2015....Some will undoubtedly interpret the Sunday Times article citing Goldman Sachs to mean that energy concerns for the U.S. are over and that, as the biggest oil producer in the world, we will no longer depend on foreign oil. The most optimistic increase in oil production will mean that the U.S. still will have to import more than half of our oil based on present consumption levels.

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