EIA predicts lean oil decades for Alaska

Source:EIA Annual Energy Outlook 2016
Source:EIA Annual Energy Outlook 2016

The Energy Information Administration released its Annual Energy Outlook today. It shows oil production from Alaska dwindling to less than half its current level after 2030.

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“Unless more oil is found in Alaska or along the pipeline right of way, it’s very possible that the Alaska pipeline itself … would end up shutting down,” says EIA Administrator Adam Sieminski. The EIA is a federal agency that was established to be a source of unbiased data, independent of policymakers.

While the EIA baseline case shows Alaska contributing almost nothing to U.S. oil production in a few decades, that’s not the only scenario. If the EIA assumes advances in technology and more discovery, the forecast for Alaska production would bump along at about the current level and then rise a bit by 2040, the end of the forecast period.

The rosier scenario assumes oil production from federal waters off Alaska, starting in 2035.

As for prices, Sieminski wasn’t very specific, even over the short-term.

“If you use the current options prices, over the next year or so, what that says is oil prices could be anywhere between about $25 a barrel and $80 a barrel,” he said, summarizing data from the oil options market.

In the IEA’s baseline forecast, oil would fetch $100 a barrel by the late 2020s. But don’t bank on it: Sieminski warns that volatility is too high to forecast with much certainty what the price in a given year.

Liz Ruskin is the Washington, D.C., correspondent at Alaska Public Media. Reach her at lruskin@alaskapublic.org. Read more about Liz here.

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