The U.S. is reversing the longterm decline in domestic crude oil production. This is directly attributable to the steady increase in offshore oil production (though the BP oil spill caused a small temporary drop in that statistic) and the rising production of crude from horizontal drilling, including hydraulic fracturing . The increasing amount of crude coming from the Bakken field in the Dakotas and Eastern Montana is particularly noteworthy.
Crude oil production in 2010 was 5.512 MM barrels/day, after dropping as low as 4.95 MM BPD in 2008. And this, in spite of the steadily declining production of crude oil coming from the North Slope in Alaska.
Supply from the Bakken
will keep rising as more wells are drilled into this prolific formation. More crude oil will also be produced from shale formation fracking for natural gas in other parts of the U.S, since oil is often associated with the shale gas.
The other good news is that imports of crude oil and petroleum products from OPEC countries have been declining. A high point was reached in 2007 when 189 MM barrels were imported from the cartel. In 2010, the figure had dropped to 143 MM
barrels. Some of the largest OPEC crude oil suppliers to the U.S. in 2011 were Saudi Arabia (1.18 MMBPD), Venezuela (893 MBPD), Nigeria (826 MBPD), and Iraq (637 MBPD).
The largest non-OPEC suppliers to the U.S. were Canada (2.16 MMBPD), Mexico (854 MBPD) and Angola (311 MBPD). To the extent, U.S. domestic crude oil supply from all sources keeps rising, and we import more Canadian crude (e.g. from Athabasca), more OPEC crude oil will be backed out. This assumes that domestic demand will stabilize at current levels as natural gas, biofuels and other alternative energy sources expand to meet rising total energy demand.
I recognize that some of this information is generally familiar to many readers of this blog. But it is useful to understand the numbers, which are available from the U.S. Energy Information Administration and easily accessed on the web.
More and more of our crude oil is therefore either produced domestically or comes from “friendly” sources. We do not need total “energy independence” to feel more secure. However, to the extent we keep importing large amounts of crude oil (even from reliable sources) our balance of trade with the world will remain negative. Higher CAFE standards, electric cars and hybrids and more use of natural gas for transportation will only slowly improve the entire automobile fleet miles-per-gallon average. So, there is no alternative. We must produce more domestic oil while the fleet gradually increases the percentage of cars propelled with engines not using gasoline or diesel fuel.
Reversing the decline in domestic crude oil production is notable. It is consonant with the renaissance of American manufacturing and is totally due to drilling innovations both onshore and offshore.