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U.S. oil production would plunge to 2008 levels of 5M bbl/day from 12.4M bbl/day currently under a fracking ban proposed by several top Democrat presidential candidates, Pioneer Natural Resources (NYSE:PXD) CEO Scott Sheffield says.
- "I don't think they understand what will happen," Sheffield told S&P Global Platts. "The decline rate is about 80% in the first year of a typical horizontal well in the Permian Basin, so can you imagine if we shut all of the rigs down to zero."
- Sheffield said the U.S. would need to import 7M-8M bbl/day of oil from the Middle East and would lose as much as 10% in gross domestic product if the U.S. drilling sector collapses.
- Total Permian oil production currently stands at 4.4M bbl/day, and Sheffield believes output will top out at 8M bbl/day in the next 8-9 years, adding 1M bbl/day this year before falling to 600K-700K bbl/day growth in 2020.
- Sheffield also sees no infrastructure constraints ahead for Permian exports, with 3.5M bbl/day in new pipeline capacity coming online through the end of 2021.