U.S. Domestic Crude Oil Production Projected to Exceed Imports This Year

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Researched by Industrial Info Resources (Sugar Land, Texas)--According to the U.S. Energy Information Administration's (EIA) March 2013 Short-Term Energy Outlook, U.S. crude oil production is expected to exceed crude oil imports this year. This will be the first time that this has happened since 1995. The gap is expected to continue widening and could reach a difference of approximately 1.8 million barrels per day by December 2014, according to EIA projections.

Click on image at right for a graph showing the projections for U.S. domestic production and crude oil imports.

The exact time of this crossover could change by various circumstances, such as the closure of offshore refineries because of hurricanes, unexpected increases in shale production, severe weather in areas that ship oil by trucks, etc., but the U.S. seems to be on rapid course toward greater energy independence.

The substantial growth in overall domestic production is, of course, due to the increase in shale oil production, particularly in Texas and North Dakota. Texas remains the leading oil producer in the U.S. From January 2010 through December 2012, Texas doubled its monthly crude oil production (34 million barrels in January 2010 to 68 million barrels in December 2012), while North Dakota's monthly production more than tripled during this time (7.3 million barrels to 23.8 million).

Click on image at left to see the yearly movement in Texas and North Dakota crude oil production since 2005. (Figures are in average barrels per day.)

North Dakota is now the second-highest oil-producing state in the U.S. and provided 10% of U.S. crude oil production in 2012.

Development of upstream, midstream and downstream oil and gas projects continues to contribute to industrial spending in both states. In the next few months, Denbury Resources Incorporated (NYSE:DNR) (Plano, Texas) plans to kick off a $200 million oil and gas drilling program on its Bakken Shale leases in McKenzie County, North Dakota. Helmerich & Payne Incorporated (Tulsa, Oklahoma) is acting as contractor on the project.

As oil production in Texas' Eagle Ford Shale ramps up, the Wolfcamp Shale in West Texas and the southeast corner of New Mexico are garnering increased attention from exploration companies that want to drill horizontal wells in the area. Around the same time that Denbury Resources kicks off its project in North Dakota, Legacy Reserves LP (Midland, Texas) plans to begin an oil & gas drilling program in Andrews County, Texas. The company will drill into both operated and non-operated production wells in the area for a period of approximately seven months in the hopes of finding exploitable oil in the area.

Information on these and other projects in available in Industrial Info's North American Oil & Gas Production Database.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.