The same technologies of hydraulic fracturing ("fracking") and horizontal drilling, which are generating the spectacular increase in U.S. natural gas domestic reserves and production, are also contributing to a profound transformation in domestic oil production.
According to the American Petroleum Institute Chief Economist John Felmy, last year was "a story of contrasts," with an increase in U.S. production of oil and a decrease in demand.
Production of U.S. crude oil in 2012 averaged 6.4 million barrels per day (bpd), a 15-year high and an increase of 13.8 percent from 2011. This is equivalent to the largest annual increase in production since 1859.
Related: Natural Gas: Cheaper, Cleaner and Under Control
By contrast demand decreased, as revealed by imports of crude oil. In December 2012, U.S. petroleum imports, including crude and products, amounted to 10.3 million bpd, compared to 10.9 million bpd in December 2011, the lowest level in 15 years. As a percentage of total domestic petroleum deliveries, U.S. imports amounted to 56.0 percent in December 2012, down from 58.3 percent in December 2011.
In fact, in 2011, the U.S. became a net exporter of refined oil products, such as diesel and gasoline, which was not seen since 1949.
The U.S. Energy Information Administration, Annual Energy Outllook 2013, projects that U.S. crude oil production will increase sharply this year, with projected annual growth averaging 234,000 bpd through 2019, when production will reach 7.5 million bpd.
Isaac Cohen is an international analyst and consultant, a commentator on economic and financial issues for CNN en Espaņol TV and radio, and a former Director, UNECLAC Washington Office.
Most Popular Stories
- Obama Administration Releases Proposal to Regulate For-Profit Colleges
- Koch Brothers Step up Anti-Obamacare Campaign
- Elizabeth Vargas' Husband Marc Cohn Addresses Rumors
- Keurig Adds Peet's coffee, Alters Starbucks deal
- Quiznos Files for Chapter 11
- U.S. to Relinquish Gov't Control Over Internet
- Vybz Kartel Convicted of Murder
- SoCalGas Reaches Record Spend on Diversity Suppliers
- U.S. Consumer Sentiment Falls in Early March
- FDIC Sues Big Banks Over Rate Manipulation