Mills: Increased efficiency and new technology result in record oil production
Increased efficiency and the development of new technology by America’s oil industry resulted in record oil production last year, according to a study by the Energy Information Administration.
“U.S. crude oil production has increased to record highs since 2010 and has risen even more quickly in recent months. These record highs have come despite declining U.S. drilling activity because the new wells are more efficient,” EIA stated in its Petroleum Supply Monthly report issued this week.
Since first surpassing the previous record in August 2023, U.S. crude oil production has increased another 2%, exceeding the pre-pandemic November 2019 peak by 0.3 million b/d. U.S. oil industry produced 13.3 million b/d in December 2023.
EIA noted the number of new wells brought on line by drilling activity has historically been the key determinant of whether crude oil production increases or decreases. However, advances in horizontal drilling and hydraulic fracturing technologies have increased well productivity, enabling U.S. producers to extract more crude oil from new wells drilled while maintaining production from legacy wells.
“Our Drilling Productivity Report (DPR) shows more production from a combination of increasing new well production and higher sustained legacy well production,” EIA stated in the report. “We define new well production as crude oil extracted during the first 12 months of production, while legacy production is crude oil extracted after the initial 12 months. The share of legacy production since 2021 has remained stable, and production from new wells has continued to increase.”
EIA said the rise in domestic oil production occurred while the number of active oil drilling rigs declined.
“Traditionally, the number of active oil-directed rigs is a leading indicator of future crude oil production because more active rigs can drill more new wells,” EIA stated. “Recently, U.S. crude oil production has increased because of technological advancements and efficiency gains despite a 69% decrease in the number of active rigs since 2014.”
The United States became the global leader in crude oil production in 2018, surpassing Russia and Saudi Arabia.
Alex Mills is the former president of the Texas Alliance of Energy Producers.
This article originally appeared on Wichita Falls Times Record News: Mills: Record oil production from efficiency and technology
