EIA expects strong crude oil production growth, primarily concentrated in the Bakken, Eagle Ford, and Permian regions, continuing through 2015. Forecast production increases from an estimated 7.5 million bbl/d in 2013 to 8.4 million bbl/d in 2014 and 9.2 million bbl/d in 2015. The highest historical annual average U.S. production level was 9.6 million bbl/d in 1970.
Crude oil production from the Bakken formation in North Dakota and Montana averaged 0.9 million bbl/d in 2013. While production briefly reached 1.0 million bbl/d in November 2013, logistical issues resulting from winter storms caused production to decline in December. Bakken production is expected to return to 1.0 million bbl/d in the first quarter of 2014. Production in the Eagle Ford formation in South Texas averaged 1.1 million bbl/d in 2013, reaching an estimated 1.3 million bbl/d in December 2013.
U.S. federal Gulf of Mexico (GOM) crude oil production averaged 1.3 million bbl/d in 2013, down slightly from 2012. EIA forecasts 1.4 million bbl/d of GOM crude oil production in 2014 and 1.6 million bbl/d in 2015. Production growth in 2014 comes from eight projects expected to come on line: Jack, St. Malo, Entrada, Big Foot, Tubular Bells, Atlantis Phase 2, Hadrian South, and Lucius. Further production growth in 2015 comes from an additional 10 projects: Axe, Cardamom Deep, Dalmatian, Deimos South, Kodiak, Pony, Samurai, West Boreas, Winter, and Mars B.
As domestic production of crude oil continues to increase, U.S. refiners have announced expansions to process more light crude oil. Marathon and Kinder Morgan have announced plans to build condensate splitters in 2014 and 2015 to process production from the Utica and Eagle Ford formations. Small topping refineries are being built in North Dakota to process Bakken crude, and Valero is expanding its Gulf Coast refining capacity. Projected crude oil inputs to refineries increase from 15.31 million bbl/d in 2013 to 15.52 million bbl/d in 2014 and rise further to 15.61 in 2015, surpassing the previous high of 15.48 million bbl/d in 2004.
The growth in domestic production has contributed to a significant decline in petroleum imports. The share of total U.S. liquid fuels consumption met by net imports peaked at more than 60% in 2005 and fell to an average of 33% in 2013. EIA expects the net import share to decline to 25% in 2015, which would be the lowest level since 1971.
U.S. Petroleum Product Prices
Led by falling crude oil prices, the projected U.S. annual average regular gasoline retail price, which fell from $3.63/gal in 2012 to an average of $3.51/gal in 2013, will continue to fall to $3.45/gal in 2014 and $3.37 in 2015. Diesel fuel prices, which averaged $3.92/gal in 2013, are projected to average $3.85/gal in 2014 and $3.78/gal in 2015.