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Oil - Domestic Production

barrels day petroleum alaska

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.

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