For 2017 through 2020, we apply decline rate estimates for existing production. Leveraging analysis discussed in the EIA’s World Energy Outlook 2013,17 we estimate non-OPEC annual decline rates at 4 percent. This reflects our estimate of an overall global average including both high-decline rate regions (e.g., US tight oil) as well as low-decline rate regions. We then added the new projects remaining in development (see Figure 2, page 3). The net effect is 2017 should see production growth of 600 thousand b/d. By 2018, we finally see production declining back to 2016 levels, which then continues downward, resulting in a nearly 2 million b/d decline from 2018 to 2020.
Given the numerous deferred projects and the time required to develop new ones, our analysis indicates the severe project cutbacks could eventually lead to a shortfall in future production. To determine how much of a shortfall, we need to look at both demand forecasts and the impact that could result from drawing down excess inventories of crude oil in storage.