U.S. oil production highest in 20 years
The Energy Department reported today that weekly average output rose to 7.002 million barrels a day in the week ended Jan. 4, a 1.16 million-barrel increase from the same week last year. The country met 83 percent of its energy needs in the first nine months of 2012, on pace to be the highest annual rate since 1991, department data show.
Production grew by the fastest pace in U.S. history last year and will accelerate in 2013 as horizontal drilling and hydraulic fracturing, or fracking, unlocks crude trapped in formations such as North Dakota's Bakken shale. The state boosted production 40 percent last year through October, Energy Department data show. Texas was up 23 percent, and Utah rose 11 percent.
"I don't think anyone expected the magnitude of the change in just one year," said Andy Lipow, president of Lipow Oil Associates, a Houston-based consulting firm. "It's extraordinary."
Oil declined 5 cents to settle at $93.10 a barrel Wednesday the New York Mercantile Exchange. The fuel declined 7.1 percent last year as stockpiles swelled by 9.2 percent. Inventories advanced to 361.3 million barrels last week, the Energy Department said Wednesday.
The Paris-based International Energy Agency said in November that U.S. oil production is on track to surpass Saudi Arabia's by 2020. The Persian Gulf country, the world's largest oil exporter, pumped 9.57 million barrels a day in December, according to data compiled by Bloomberg.
The U.S. will pump an average 7.32 million barrels a day this year and 7.92 million in 2014, the department said yesterday in its monthly Short-Term Energy Outlook.
North Dakota overtook Ecuador, the smallest producer in the Organization of Petroleum Exporting Countries, last year and is closing in on Qatar, the second-smallest, which pumped 750,000 barrels a day in December, according to data compiled by Bloomberg. The state's output reached 747,000 barrels a day in October, Energy Department data show.
The U.S. has churned out more oil for four consecutive years as drillers perfected a combination of technologies pioneered by Continental Resources Inc. in the Bakken.
In 2004, the company completed a profitable well by pairing horizontal drilling, in which the bore travels lengthwise through the richest slice of rock, with fracking, which directs a high-pressure jet of sand, water and chemicals underground to crack open the formation and free oil and gas.
The Environmental Protection Agency in 2011 linked the method to groundwater pollution, raising speculation that new regulations may slow exploration. The method has also pushed U.S. natural gas production to record levels.
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