U.S. oil production is on track to reach a near historic high by 2016, before leveling off and eventually beginning to taper in 2020, according to a new federal forecast.
I don’t know how you read that as a screaming stop.
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read the next paragraph:
The nation’s crude output will crest at 9.5 million barrels per day in 2016, according to the U.S. Energy Information Administration’s latest annual energy outlook, released Monday.
How does the word “crest” and “reach near historic high by 2016 before leveling off” mean different slow down rates to you?
We all know that production is a function of price. Oil recovery is a function of return on investment. As the price rises, alternatives become more viable. For example, if the major railroads switch over to using natural gas to power their electric locomotives, then the demand for diesel fuel goes down fairly significantly. They are the biggest user of diesel fuel in North America other than the US Navy. This is something the BNSF is exploring right now. If they switch, so will the UP, NS , CSXT, CN and CPRS.
Also, over the next few years we are going to see more trucking companies and local delivery companies switch over to natural gas. FedEx and UPS are already switching over. Bus companies are switching over. The postal service SHOULD switch over. It all comes down to one thing: MONEY. Is this going to increase our profit margin.