U.S. Oil-Production Rise Is Fastest Ever

The Wall Street Journal ^ | 18 January 2013 | TOM FOWLER

[MinorityRepublican]

U.S. oil production grew more in 2012 than in any year in the history of the domestic industry, which began in 1859, and is set to surge even more in 2013.

Daily crude output averaged 6.4 million barrels a day last year, up a record 779,000 barrels a day from 2011 and hitting a 15-year high, according to the American Petroleum Institute, a trade group.

It is the biggest annual jump in production since Edwin Drake drilled the first commercial oil well in Titusville, Pa., two years before the Civil War began.

The U.S. Energy Information Administration predicts 2013 will be an even bigger year, with average daily production expected to jump by 900,000 barrels a day.

The surge comes thanks to a relatively recent combination of technologies—horizontal drilling and hydraulic fracturing, or fracking, which involves pumping water, chemicals and sand at high pressures to break apart underground rock formations.

Together, they have unlocked deposits of oil and gas trapped in formations previously thought to be unreachable.

That has meant a resurgence of activity in well-established oil regions, such as West Texas's Permian basin, as well as huge expansions in areas that had been lightly tapped in the past, such as North Dakota's Bakken shale region.

The Bakken has gone from producing just 125,000 barrels of oil a day five years ago to nearly 750,000 barrels a day today.

[usconservative]

I’ll bet they do. My friend who works at the refinery I described above says much the same thing. There’s zero tolerance for safety violations.

[ckilmer]

the other thing about the cline formation is that its much cheaper to extract the oil and get it to market. by how much? not sure. they say its the oil is shallower and nicely stacked in layers. plus the infrastructure to get it to market is available. likely the innovation with reusing water will lower costs too.

[PA Engineer]

the other thing about the cline formation is that its much cheaper to extract the oil and get it to market. by how much? not sure. they say its the oil is shallower and nicely stacked in layers. plus the infrastructure to get it to market is available. likely the innovation with reusing water will lower costs too.

Texas actually has many of the waste injection wells. This brings their average cost per well down substantially. In the Northeast, it adds about $800K average. We do have a substantial amount of infrastructure available for both Marcella and Utica. The problem here is the gathering lines are more like transmission.

[ckilmer]

Ohio seems to have plenty of oil more oil condensates. but isn’t Pennsylvania mostly about natural gas?

The point about cost is that sometime between now and 2016 the price of oil is going to swoon under supply pressure. the high cost drillers especially in the Bakken will have to lay off new drilling.