We should all know by now that the flood of U.S. oil production is going to make the country energy independent within a few years, and the price of crude is destined to dip as did the gas price before. Or maybe not.

The inertia toward U.S. energy independence seems unstoppable as a river of crude flows from developing unconventional shale-oil plays, but the equity analysts at Bernstein Research take an opposing viewpoint, as detailed in a June research report. “We don’t believe shale oil will flood the market and cause a dramatic drop in oil prices,” writes senior analyst Bob Brackett.

Don’t misunderstand. He acknowledges the huge increase in production, in excess of 2 million barrels of oil equivalent (BOE) per day, is unprecedented.

That compares with 3 million BOE of added production from shale gas, which at one point dropped prices below $2 per Mcf. While excess crude production has affected the differential between WTI and Brent, the price for each has been resilient, near or above triple digits.

But the shale-oil revolution is destined for an inflection point, and soon.

“We don’t expect the million barrels a day of oil growth that we saw year-on-year at the end of last year,” he says. “That to us is a critical juncture, when people start to realize that we won’t see that same scale, that same magnitude of oil growth. The inflection point is the day when people realize that the rate of growth in U.S. liquid production is slowing.”

Alas, slowing, at the advent of the industry cracking the code for extracting oil from tight rocks?

The shale-oil revolution to date has been almost solely in two plays, the Bakken shale in North Dakota and the Eagle Ford shale in Texas, Bernstein says. And individual well results in those have peaked.

“The legacy oil-shale plays are maturing and the productivity of new wells is in decline,” says fellow analyst Scott Gruber. Bakken initial production rates have declined 15% since 2010; Eagle Ford IPs are flat. That’s because E&Ps consume the best acreage first, he says, and then move on to the next best. “We’ve filled in all the best locations.”

Naturally. But a line of emerging plays will surely fill the crude pipelines, right? Not so, per Brackett. “Emerging oil plays have not matched the productivity of the Bakken or Eagle Ford. Well productivity is declining as operators are moving to less productive basins and drilling lower-quality acreage.”

Take the Permian Basin, the No. 1 contender. The unconventional Permian is a distant third in shale oil produced. While having the same number of unconventional wells as the Eagle Ford, it produces half the volume. The others—the Niobrara, Mississippi Lime, Utica—account for an increasing proportion of shale-oil drilling activity, “yet the reserves added per well in these plays are half the reserves added in the Bakken and Eagle Ford,” says Gruber, and just a third on oil reserves alone.

“We would love to be able to discover one in its infancy, (but) to date we’ve been disappointed by the emerging shales we’ve encountered. We think we know where the resources are, and we think the best is behind us,” says Brackett.

Additionally, shale-oil plays are subject to high decline rates, which offset new production. This suggests that “maintenance of the high growth rate will not be possible with a constant or declining rig count,” he says.

But aren’t the new shale plays still more economic than old and tired conventional fields?

“Actually, no,” says Gruber. “Emerging plays are no better than marginal conventional plays. The current marginal cost of crude in the U.S. is around $95 per barrel. The cost of the emerging resource plays extends up to and beyond $95. So if these new plays are the future of U.S. production, oil prices must remain high to facilitate their development.”

And there is the crux of their argument for prices increasing through 2020. “The shaleoil rig count is stagnant, which reflects the fact that the industry is actually cash-constrained at $90 oil,” says Gruber.

“In order to maintain current levels of oil production, marginal conventional production must be maintained with high oil prices.”

Shale-oil production will certainly push out imports, but “we’re nowhere near energy independent,” Brackett says; more like co-dependent. He points to EIA data showing U.S. oil production flat for a month and a half as a portender. “We clearly think this is the year where the inflection point will start to occur. High oil prices are here to stay.”

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