12.23 Million B/D: Record Oil Production Strengthens U.S.

Jessica Lutz
Posted March 6, 2020

It’s been a big week for announcements coming out of the U.S. Energy Information Administration (EIA) and the nation’s natural gas and oil industry.

On Monday, EIA said that annual U.S. oil production broke another big record in 2019, and swiftly followed that with news on Tuesday that U.S. natural gas use has reached new record highs. Both are great news for American energy and national security, the economy and the environment.

In 2019, U.S. oil production surpassed 12 million barrels per day for the first time (12.23 million b/d), up 11% over 2018, thanks to advanced hydraulic fracturing and horizontal drilling technologies. Remarkably, these production records came despite less U.S. oil-targeted drilling, which fell 22.6% year over year in January. This was more than offset by increased productivity.

Though it remained near the top of the five-year range, U.S. petroleum demand decreased in January – continuing a downward trend that began in November – due to a number of factors including implementation of IMO 2020, the new standard that requires the marine sector to reduce sulfur emissions by switching to lower sulfur fuels, and the early effects of the coronavirus. The combination of less demand and more supply resulted in lower prices – good news for the pocketbooks of American families and businesses who rely on these resources – and has served to demonstrate the flexibility of the U.S. natural gas and oil industry and responsiveness to market needs.

While the decrease in petroleum demand is expected to continue, U.S. natural gas consumption, on the other hand, just set a new record – up 3% in 2019, led by new natural gas-fueled electric capacity and lower natural gas prices. Natural gas continues to account for the largest share of electricity generation – 38% of total generation in 2019 – and that increased use is the main reason global energy-related carbon dioxide emissions flattened in 2019, even as the world economy expanded by 2.9%.

The U.S. is the world’s leading producer of natural gas and oil, and a net exporter of total energy – a great position to be in as global energy demand continues to rise. And America is projected to continue producing historically high levels of natural gas and oil through 2050, as the fuels remain central to the nation’s future energy mix.

As the U.S. becomes more energy self-sufficient, workers and families directly benefit from our resource abundance. American energy jobs are at a record high, and households are saving $203 billion annually on energy costs – or $2,500 for an average family of four, according to the White House Council of Economic Advisors. At the same time, the increased affordability of natural gas has incentivized fuel switching in power generation and contributed to emissions reductions and climate progress.

This unprecedented sector expansion, and widespread economic prosperity, has been made possible by smart policymaking and industry-driven innovations – including modern hydraulic fracturing. Maintaining this production growth and securing America’s energy future requires policy proposals that support the natural gas and oil industry’s leadership toward economic and environmental solutions.