For first time since ’95, U.S. oil production tops imports
11/13/2013 3:19 PM
11/14/2013 3:47 PM
For the first month in nearly two decades, the U.S. extracted more oil from the ground than it imported in October, marking a milestone for a nation seeking to wean itself from foreign oil.
A promising sign for the economy, the shift could foreshadow opportunities to boost jobs in the U.S., lower the trade deficit and insulate the economy from foreign crises that can send oil prices rising. But it also speaks to deeper changes in the way Americans use oil, as price-conscious consumers seek to limit what they pay at the pump.
Not since 1995 has the U.S produced more crude than it imported. For several years, domestic production has risen and net imports have declined. But data released Wednesday by the Energy Information Administration, the statistical wing of the Energy Department, show that the trend lines have finally crossed, with crude production topping 7.7 million barrels per day.
The news came just a day after the International Energy Agency forecast that the United States will surpass Russia and Saudi Arabia to become the world’s largest oil producer in 2015.
The surge in energy production is led by fields like the Eagle Ford in Texas and the Bakken in North Dakota, where oil companies are using hydraulic fracturing and horizontal drilling to tap oil and natural gas trapped in shale rock.
But the International Energy Agency’s long-term outlook predicts that the Middle East will retake its position by the mid-2020s as America’s shale oil output peaks and starts to decline.
Obama administration officials said the president’s effort to boost fuel efficiency for cars has been a driving factor, helping to reduce U.S. demand for gas and, in turn, lessening the need to import.
Officials said requiring companies to make cars that run on less gas has gone a long way toward realizing President Barack Obama’s goal of curbing global warming. They also credited the president with promoting drilling on federal lands and offshore as part of his strategy to encourage U.S. energy production.
“Taken together, these factors not only reduce our dependence on foreign oil but work to reduce overall carbon pollution in our communities,” White House spokesman Jay Carney said.
But on the production side, energy experts and the oil industry say the higher volumes of oil come despite Obama’s policies, not because of them. They say Obama has made it harder, not easier, to produce oil on government land.
“It’s a very positive sign — enormously positive,” said Philip Verleger, an independent U.S. energy analyst. “But energy policy has not been a help. It’s been a hindrance.”
Analysts said high oil prices have made it lucrative for companies to invest in new wells, even as easy-to-drill areas become scarce and companies must resort to costlier technologies to unearth oil in North Dakota and in the deep waters of the Gulf of Mexico.
The energy agency predicts that “sweet spots” in America’s top shale fields will run out and that drilling will move to less-productive areas that struggle in cost competition with other nations.
But the agency said it could be wrong about a U.S. decline.
“United States performance has consistently overshot most projections to date and it is possible that more resources will be found and developed to sustain production at a higher level and for longer than we project,” the report said. “Especially if oil prices hold up, technology advances continue and environmental concerns are allayed.”
Sean Cockerham of the Star-Telegram Washington Bureau contributed to this report.
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