E&Y: Tough for U.S. to rival Saudi Arabia

• Tweet

HOUSTON, Jan. 29 (UPI) -- The oil production boom in the United States might not mean much for the economy if market prices remain suppressed, Ernst and Young reports.

U.S. oil production is surging with increased production coming from shale reserves.

Accounting firm Ernst and Young notes that the United States will account for the largest source of oil sector growth in 2013. That doesn't mean the growth puts Saudi Arabia's leadership position in jeopardy, it states. If oil prices fall to less than $80 per barrel, the economic benefits won't last because U.S. oil production "comes at an extremely high cost."

Marcela Donadio, an oil and gas researcher for Ernst and Young, said the financial firm isn't necessarily concerned with U.S. oil and gas production figures.

"What matters is the dramatic reversal of the U.S. energy fortunes and the need for the U.S. to take significant steps to ensure oil supply growth continues," she said in a statement.

Cindy Schild, a refining manager for the American Petroleum Institute, said Washington needs to adopt a common sense policy approach that capitalizes on oil and natural gas wealth.

API said that, while natural gas drilling was declining, oil well drilling for the fourth quarter of 2012 experienced double-digit growth when compared to the previous year.