U.S. shale may be the darling of the oil industry right now, but the boom isn’t going to last, according to the International Energy Agency.
The richest areas will have been exploited by the mid-2020s, meaning the average well drilled in 2025 will be less productive than today, the agency said in its annual World Energy Outlook.
The U.S. will still be pumping large quantities of crude from shale rock -- also known as tight oil -- but output will taper off because a larger number of wells are needed to be completed to maintain or increase production.
Crude production from nations outside the Organization of Petroleum Exporting Countries dominates near-term supply growth, with the U.S. accounting for nearly 75% of the increase in global output to 2025.
But this stalls as American tight oil hits a plateau, then falls by about 1.5 million barrels a day in the 2030s. The recent dearth in new approvals of conventional projects hampers growth elsewhere.
"After 2025, members of OPEC are central to meeting oil demand growth," the report said.
Outside the U.S, the IEA sees tight oil growth ramping up, notably in Argentina, Russia, Canada and Mexico. "There is more than 3.5 million barrels a day of tight oil production from areas outside the U.S. in 2040," according to the report.
By Christopher Sell