Posted April 3, 2015
A couple of data points and some observations on energy security.
First data point: The U.S. Energy Information Administration (EIA) reports that last year the United States enjoyed the largest volume increase in crude oil production since record keeping began in 1900. That’s right, the largest increase in 115 years!
Production of crude (including lease condensate) increased during 2014 by 1.2 million barrels per day to 8.7 million barrels/day. EIA says that on a percentage basis 2014’s output increased 16.2 percent, the highest growth rate since 1940. Here’s what the increase looks like in EIA’s chart:
You can thank shale and fracking. EIA:
Most of the increase during 2014 came from tight oil plays in North Dakota, Texas, and New Mexico where hydraulic fracturing and horizontal drilling were used to produce oil from shale formations. … Annual increases in crude oil production regularly surpassed 15% in the first half of the 20th century, but those changes were relatively less in absolute terms because production levels were much lower than they are now. Crude oil production in the United States has increased in each of the previous six years. This trend follows a period from 1985 to 2008 in which crude oil production fell in every year (except one).
OK, now the second data point: EIA also reports that U.S. imports of crude and petroleum products continued to fall in 2014. Last year’s imports of 9.2 million barrels per day (down from 9.8 million/day in 2013) were at their lowest point since 1995 (8.8 million barrels/day):
Now the energy security observations: Gallup reports that fewer than one in three Americans view the U.S. energy situation as “very serious” – continuing a four-year decline in that metric. Gallup’s chart:
There could be a number of factors in Gallup’s snapshot of the way Americans feel on this, but it’s clear that increased U.S. energy production and its effect on global markets, impacting gasoline prices, is a big part of it. Gallup:
As gas prices have been generally lower as of late, so too have Americans' worries about the availability and affordability of energy. … This general stability may be related to Americans' lessened concern about energy. This issue has decreased in prominence in the minds of so many Americans that one in five now say the energy situation is not serious at all. The steep increase in domestic production of crude oil, which strengthens overall U.S. energy independence, may also have something to do with Americans' diminished concerns.
Because of the global nature of the crude oil market, it’s more accurate to talk about increasing American self-sufficiency, which is due to increasing domestic oil and natural gas production that’s reducing crude imports. Polling like Gallup’s is picking up a sense among Americans that the country is more energy secure, so they worry about energy less.
This is good, but it shouldn’t foster complacency. Thanks to energy in shale and other tight-rock formations and the advent of advanced hydraulic fracturing and horizontal drilling, the U.S. is in the midst of an energy revolution that has dramatically changed the arc of our energy outlook – from one of scarcity and limitations to one of relative abundance and opportunity.
But access to reserves – onshore and offshore – is needed to sustain and grow the revolution and its positive effects on job creation, economic growth and … energy security. With advanced technology, innovation and private investment the U.S. has done what some said couldn’t be done: We’ve drilled our way into more production and lower costs. We can expand America’s energy renaissance with more safe and responsible energy development, but it will take bold planning now to see results in the future.
ABOUT THE AUTHOR
Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.