[United States:] Domestic Oil Production Reversed Decades-Long Decline in 2009 and 2010

EIA, Today in Energy, Apr 27, 2011

Following declines [please see remarks below -- D.R.] in all but one year [1991] from 1986 to 2008, U.S. oil production (crude oil and lease condensate) increased in 2009 and again in 2010. Due in part to Hurricanes Ike and Gustav, average annual production dipped below 5.0 million barrels per day (MMbbl/d) in 2008, then climbed to 5.4 MMbbl/d in 2009 and 5.5 MMbbl/d in 2010, with 2010 volumes representing an 11% increase over 2008.

While much of the increase in 2009 was associated with deepwater developments in the Federal Gulf of Mexico, the increase in 2010 was led by escalating horizontal drilling programs in U.S. shale plays, notably the North Dakota section of the Bakken formation.

Operators drilling at the Bakken and other shale formations are combining horizontal wells and hydraulic fracturing - the same technologies used to significantly increase shale gas production - to boost oil production. Horizontal drilling has become especially important as oil prices have risen considerably. According to Baker Hughes rig count data, horizontal rigs comprised less than one-third of oil-directed rigs in September 2008, the previous overall rig count peak. With a tripling of horizontal oil rigs since then, that share has increased to about 46%. For further information, please see today's [Apr 27] edition of This Week in Petroleum. [Also, please see interactive charts of: 1) U.S. Oil Production, annual average, 1986-2010; and 2) U.S. Oil Production, monthly average, 2008-2010. -- D.R.]

(The decline in U.S. production in 1986 was prompted by a steep fall in Lower 48 crude production. In the late 1980s, U.S. domestic oil supply squeeze was reinforced by an initiation of decline in Alaska's output---please see my posts, including remarks, here and here. Also, please see Aaron and David Rachovich (post/table), "U.S. Crude Oil Production, 1970-2010," here. In a speech at Georgetown University in Washington, March 30th, President Obama said, "Last year, American oil production reached its highest level since 2003, and for the first time in more than a decade [last time 1997 - 49% -- D.R.], oil we imported [net imports] accounted for less than half the liquid fuel we consumed [i.e., 49%]."---please watch President Obama's speech, here. For the Bakken play and map, please see my post "Continental: Bakken's Giant Scope Underappreciated," including remarks, here. For North Dakota's oil production in historical perspective, please see my post "North Dakota ... ," remarks below, here. For U.S. shale gas resources and production, please see my post, including remarks, here. For the ongoing surge in horizontal drilling rigs, please see my post here. Also, please see my post "CERAWeek: Unconventional Gas Lifts US Petrochemicals," here. -- D.R.)