One of Oklahoma’s most prominent oilmen has a bone to pick with the agency in charge of forecasting U.S. oil production.
Continental Resources founder and chairman Harold Hamm said the U.S. Energy Information Administration is being too optimistic in its growth projections.
"Right or wrong, no other agency provides data with greater impact, so it's crucial for EIA to provide the most accurate energy supply and demand data possible," Hamm said.
The current EIA year-end forecast puts domestic production at 9.7 million barrels per day, when it’s really around 9.2 million, and the EIA forecast has outpaced production growth for more than a year.
Since last fall, the average annual growth rate has been 59,000 barrels a day. Hamm said it’s difficult, if not impossible, to match EIA forecasts for 9.7 million barrels per day by the end of this year.
"It would take 130,000 barrels a day, month over month ... to match those numbers," Hamm said.
Hamm said because of that roughly 500,000 barrel per day difference, light, sweet crude overseas sells at a price 10 percent higher than similar-grade oil from U.S. wells.
"This 10 percent advantage that puts America last, not first — and that 10 percent can mean the margin of profit or loss for many of the wells in America," Hamm said.
The $4 billion Hamm said that price gap will cost the U.S. in 2017 is from revenue, royalties and taxes. He said the EIA forecast doesn’t properly account for U.S. refinery and pipeline infrastructure shortcomings.
Hamm spoke at an EIA webinar on Thursday. It is rare, if not unprecedented, for someone in Hamm's position in the oil industry to participate in one.
