Blog

More Good News on U.S. Oil Production

The United States produced more petroleum and petroleum liquids in November of 2012 than any other country in the world, including Saudi Arabia:

oil1-600x421Source: AEI

We also had the biggest jump in annual petroleum production ever:

178575_5_Source: RealClearEnergy.org

As the editors at RealClearEnergy.org write:

According to figures released by the American Petroleum Institute last week, domestic oil production rose 780,000 barrels per day (bpd) in 2012, a 13.8 percent rise over 2011 and the largest annual increase in American history! Daily production is almost back to 7 million barrels, a level not achieved since 1992. This is an amazing reversal for fields that appeared to be in terminal decline and were Exhibit A for Peak Oil Theory.

Note that this is massive increase in oil production is primarily due to the development of hydraulic fracturing in the United States. Somewhat ironically, it has taken place under President Obama who has not been particularly kind to the oil industry. Remember, despite this massive increase in total production, production is still stagnant on federal lands:

federal oil

This last graph is from a report prepared by the Congressional Research Service, with the eye-catching title “U.S. Crude Oil and Natural Gas Production in Federal and Non-Federal Areas.”   As the report notes:

Congress is faced with proposals designed to increase domestic energy supply, enhance security, and/or amend the requirements of environmental statutes. A key question in this discussion is how much oil and gas is produced each year and how much of that comes from federal and non-federal areas. On non-federal lands, there were modest fluctuations in oil production from fiscal years (FY) 2008-2010, then a significant increase from FY2010 to FY2012 increasing total U.S. oil production by about 1.1 million barrels per day over FY2007 production levels. All of the increase from FY2007 to FY2012 took place on non-federal lands, and the federal share of total U.S. crude oil production fell by about seven percentage points.

Oil production is doing very well in the United States, thanks to production on non federal lands. It will continue to increase as production grows in Texas, and assuming California decides that it will allow access to the Monterey Shale, which does involve federal land. Finally, if Congress and the President will allow it, the Gulf of Mexico and Alaska both have tons of oil waiting to be drilled, which would push our daily production even higher than where it’s headed.

Comments

Send a Reply