The price of a barrel of crude is way up, and government officials say incentives implemented by the Bush Administration in 2001 will soon be boosting production in the Gulf of Mexico. But despite the incentives, oil production in the Gulf may start to decline within the next 6 years, according to a new forecast from the Department of the Interior.
Total U.S. oil production peaked in 1970, but drillers have been driving up production in the Gulf, the country's top oil-producing area, by pushing into ever-deeper waters. Now companies are poised to extract the last drops. According to a new forecast by Interior's Minerals Management Service (MMS), Gulf production should surge by almost 50% by the end of the decade as industry reaches for oil beneath "ultradeep" (more than 1500 meters) waters and from more than 9 kilometers beneath the shallow sea floor. But that surge will be short-lived, says MMS, and Gulf production is likely to decline after 2011.
That's sharply at variance with the outlook espoused by the U.S. Department of Energy, which recently forecast that total U.S. oil output would hold steady through 2025. The projected Gulf peak--at 2.3 million barrels a day, or a quarter of total U.S. oil production--is the kind of sign that pessimistic oil analysts expect to see as world oil production peaks in the coming decade and the era of cheap oil comes to an end.
