Seacoast NRG

According to data released today by the US Energy Information Agency, domestic production (including Alaska and off-shore) of crude oil in 2006 dropped to 1.87 billion barrels, the lowest level since 1949, and barely half the quantity produced in the peak year of 1970. 

After nearly a century of explosive growth, US production of oil very dramatically peaked in 1970 at 3.52 billion barrels. Although production did surge again in the early 1980s, it never again reached the 1970 level, and has been in decline since 1985, losing, on average, about 1.8% per year.  In contrast, imports of crude oil in 2006 totalled 3.68 billion barrels, down slightly, but still very close to the record of 3.70 billion barrels imported in 2005. 

Stated another way, for every barrel of crude produced from US wells in 2006, another 2 barrels were imported.

The very existence of peak in US production fuels the ongoing debate about a similar peak in world crude oil production. M. King Hubbert predicted as early as 1956 that US production would peak and decline, and would likely do so in 1975.  In a 1969 paper, Hubbert then applied his analytical techniques to world oil production, and predicted a worldwide peak would occur 2000.  (See my earlier post for the background and history of Peak Oil.)

Contemporary researchers, some using techniques very similar to Hubbert’s, believe that we are now at or very near a world production peak. Meanwhile other very reputable analysts and consultants, such as CERA, insist that no definitive peak will exist in world production, and that further investment and technological improvements will continue to bring increases in output, with only a slow and undulating decline, decades hence.

My thinking is that if innovation and investment were to prevent, or even soften, a peak in world oil production, wouldn’t US production also benefit? Yet the overall trend in US production for the past 36 years, despite technological innovations, has been downward–the back side of Hubbert’s peak. It’s difficult to see why oil production in the US, which I have to assume is as technologically advanced and well-funded as that of any nation, would not serve as the (peak) model for the rest of the world.