Oil - Domestic Production

U.S. production of petroleum reached its highest level in 1970 at 11.3 million barrels per day total. (See Table 2.2.) Of that amount, 9.6 million barrels per day were crude oil. (See Figure 2.4.) After 1970 domestic production of petroleum declined. By 2003 U.S. domestic production averaged about 7.5 million barrels per day. (See Table 2.2.) Of that amount, 5.7 million barrels per day were crude oil. (See Figure 2.4.) Figure 2.5 shows the overall flow of petroleum in the United States for 2003.

According to the Annual Energy Review 2003, published by the EIA, in 2003 the 520,000 producing wells in the United States produced an average of eleven barrels per day per well, significantly below peak levels of more than eighteen barrels per day per well in the early 1970s. Any new oil discoveries are unlikely to result in a significant increase in domestic production in the near future because of the long lead-time needed to prepare for production.

Most domestic oil production takes place in only a few U.S. states. Texas, Alaska, Louisiana, California, and the offshore areas around these states produce about 75% of the nation's oil. Most domestic oil (about 64%, or 3.7

TABLE 2.2

Petroleum production, selected years, 1949–2003
(Thousand barrels per day)
	Production						Trade
	Crude oil
Year	48 states1	Alaska	Total	Natural gas plant liquids	Total	Other domestic supply2	Imports	Exports	Net imports	Stock change3	Crude oil losses and unaccounted for4	Petroleum products supplied
1United States excluding Alaska and Hawaii.
2Refinery processing gains (refinery production minus refinery inputs), and field production of finished motor gasoline, motor gasoline blending components, and other hydrocarbons and oxygenates.
3A negative number indicates a decrease in stocks and a positive number indicates an increase. Distillate stocks in the "Northeast Heating Oil Reserve" are not included.
4"Unaccounted for" represents the difference between crude oil supply and disposition.
R=Revised.
P=Preliminary.
(s)=Less than 500 barrels per day.
Web Pages: For data not shown for 1951–1969, see http://www.eia.doe.gov/emeu/aer/petro.html. For related information, see http:/www.eia.doe.gov/oil_gas/petroleum/info_glance/petroleum.html.
SOURCE: "Table 5.1. Petroleum Overview, Selected Years, 1949–2003 (Thousand Barrels per Day)," in Annual Energy Review 2003, U.S. Department of Energy, Energy Information Administration, Office of Energy Markets and End Use, September 7, 2004, http://www.eia.doe.gov/emeu/aer/pdf/aer.pdf (accessed September 28, 2004)
1949	5,046	0	5,046	430	5,447	−2	645	327	318	−8	38	5,763
1950	5,407	0	5,407	499	5,906	2	850	305	545	−56	51	6,458
1955	6,807	0	6,807	771	7,578	34	1,248	368	880	(s)	37	8,455
1960	7,034	2	7,035	929	7,965	146	1,815	202	1,613	−83	8	9,797
1965	7,774	30	7,804	1,210	9,014	220	2,468	187	2,281	−8	10	11,512
1970	9,408	229	9,637	1,660	11,297	359	3,419	259	3,161	103	16	14,697
1971	9,245	218	9,463	1,693	11,155	382	3,926	224	3,701	71	−45	15,212
1972	9,242	199	9,441	1,744	11,185	388	4,741	222	4,519	−232	−43	16,367
1973	9,010	198	9,208	1,738	10,946	483	6,256	231	6,025	135	11	17,308
1974	8,581	193	8,774	1,688	10,462	516	6,112	211	5,862	179	38	16,653
1975	8,183	191	8,375	1,633	10,008	497	6,056	209	5,846	32	−3	16,322
1976	7,958	173	8,132	1,604	9,736	515	7,313	233	7,090	−58	−63	17,461
1977	7,781	464	8,245	1,618	9,862	575	8,807	243	8,565	548	22	18,431
1978	7,478	1,229	8,707	1,567	10,275	549	8,363	362	8,002	−94	73	18,847
1979	7,151	1,401	8,552	1,584	10,135	571	8,456	471	7,985	173	6	18,513
1980	6,980	1,617	8,597	1,573	10,170	641	6,909	544	6,365	140	−20	17,056
1981	6,962	1,609	8,572	1,609	10,180	558	5,996	595	5,401	160	−78	16,058
1982	6,953	1,696	8,649	1,550	10,199	583	5,113	815	4,298	−147	−68	15,296
1983	6,974	1,714	8,688	1,559	10,246	541	5,051	739	4,312	−20	−112	15,231
1984	7,157	1,722	8,879	1,630	10,509	599	5,437	722	4,715	280	−183	15,726
1985	7,146	1,825	8,971	1,609	10,581	612	5,067	781	4,286	−103	−145	15,726
1986	6,814	1,867	8,680	1,551	10,231	674	6,224	785	5,439	202	−139	16,281
1987	6,387	1,962	8,349	1,595	9,944	703	6,678	764	5,914	41	−145	16,665
1988	6,123	2,017	8,140	1,625	9,765	708	7,402	815	6,587	−28	−196	17,283
1989	5,739	1,874	7,613	1,546	9,159	722	8,061	859	7,202	−43	−200	17,325
1990	5,582	1,773	7,355	1,559	8,914	763	8,018	857	7,161	107	−257	16,988
1991	5,618	1,798	7,417	1,659	9,076	807	7,627	1,001	6,626	−10	−195	16,714
1992	5,457	1,714	7,171	1,697	8,868	900	7,888	950	6,938	−68	−258	17,033
1993	5,264	1,582	6,847	1,736	8,582	1,020	8,620	1,003	7,618	151	−168	17,237
1994	5,103	1,559	6,662	1,727	8,388	1,025	8,996	942	8,054	15	−266	17,718
1995	5,076	1,484	6,560	1,762	8,322	1,078	8,835	949	7,886	−246	−193	17,725
1996	5,071	1,393	6,465	1,830	8,295	1,150	9,478	981	8,498	−151	−215	18,309
1997	5,156	1,296	6,452	1,817	8,269	1,192	10,162	1,003	9,158	143	−145	18,620
1998	5,077	1,175	6,252	1,759	8,011	1,267	10,708	945	9,764	239	−115	18.917
1999	4,832	1,050	5,881	1,850	7,731	1,262	10,852	940	9,912	−422	−191	19,519
2000	4,851	970	5,822	1,911	7,733	1,325	11,459	1,040	10,419	−69	−155	19,701
2001	4,839	963	5,801	1,868	7,670	1,287	11,871	971	10,900	325	−117	19,649
2002	4,761	984	R5,746	R1,880	R7,626	R1,374	R11,530	R984	R10,546	R−105	R−110	R19,761
2003P	R4,763	974	5,737	1,717	7,454	1,384	12,254	1,017	11,237	45	−14	20,044

FIGURE 2.4

million barrels per day) comes from onshore drilling, while the remaining 2.1 million barrels come from offshore sources. (See Figure 2.6.) Supplies from Alaska, which increased with the construction of a direct pipeline in the late 1970s, have begun to decline. Notice how the gap between "Total" and "48 States" is narrowing in Figure 2.7; this gap is Alaska's share of U.S. oil production.

Unless protected wildlife refuges in Alaska are opened for drilling, U.S. oil production will likely continue its decline. The Alaskan government and the administration of President George W. Bush strongly support drilling for oil in Alaska's Arctic National Wildlife Refuge. But there is great controversy over this proposal because of environmental concerns. The U.S. House of Representatives has approved drilling in the Arctic refuge in the past, only to have the proposal repeatedly fail in the Senate. As of November 2004 no agreement had been reached.

The United States is considered to be in a "mature" oil development phase, meaning that much of its oil has already been found. The amount of oil discovered per foot of exploratory well in the United States has fallen to less than half the rate of the early 1970s. Of the country's thirteen largest oil fields, seven are at least 80% depleted. Geological studies have estimated that 34% of the undiscovered recoverable resources are in Alaska, but it is uncertain whether the oil will ever be recovered.

Domestic production is also hampered by the expense of drilling and recovering oil in the United States compared to the expense incurred in Middle Eastern countries. Middle Eastern producers can drill and bring out crude oil from enormous, easily accessible reservoirs for around $2 a barrel. In contrast, the U.S. Department of Energy (DOE) estimates it costs an American oil producer about $14 to produce a barrel of oil, not counting royalty payments and taxes, which add to the cost. Of all the successful domestic oil wells drilled, only about 1% have been "wildcat" wells that have led to the discovery of new large fields, and these discoveries have provided only minor additions to the total proved reserves.