First Time Since 1995: U.S. Produces More Oil Than It Imports

By:  Bob Adelmann
06/10/2013
       
First Time Since 1995: U.S. Produces More Oil Than It Imports

The confluence of numerous factors in both Texas and North Dakota is working to help the United States wean itself from dependence on foreign oil, including low taxes, improved technology, and enforced private property rights.

When Brantley Hargrove noted in the Dallas Observer on Thursday that, during the last week in May, the United States produced more oil than it consumed (for the first time since February, 1995), he was awfully quick to give nearly all the credit to Texas. But he was proud, nevertheless:

Tight oil formations in the Eagle Ford Shale of South Texas and the Permian Basin — along with production in North Dakota — allowed the country to meet 88 percent of its energy requirements this spring, Bloomberg reports. That hasn't happened since 1986.

By the end of this year, it's predicted [that] the Eagle Ford will be the biggest tight-oil producing play in the country. And unlike the Bakken Shale in North Dakota, there's no bottleneck, and no shortage of conveyances to get the oil to market. It is, after all, next to one of the largest refinery complexes in the country.

Which is to say, it looks like Texas is going to be oil flush for years to come.

During the last week in May, U.S. oil production averaged 32,000 barrels a day more than were being imported, causing oil inventories to climb to their highest level in 82 years. The United States pumped a total of 7.3 million barrels every day, compared to 7.27 million barrels imported from OPEC and elsewhere. This was inevitable: Domestic oil production has increased by 42 percent over the past five years while imports have slumped by 26 percent over the same time.

This has had an enormous positive economic impact on both states, but much more so for North Dakota, according to the Bureau of Economic Analysis (BEA). In its state income analysis for 2012 the BEA noted that while the average state’s income slowed between 2011 and 2012, North Dakota’s surged by more than 12 percent, and added:

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