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US Crude Oil Production Continues at Four-Year Highs

US crude oil production for October averaged 5.36 million barrels per day, continuing at levels not seen since 2005, according to the American Petroleum Institute’s (API) Monthly Statistical Report.

Crude production from the Lower 48 states averaged 4.67 million barrels per day, up from both last year and prior months. Even though crude production last October had recovered from precautionary platform shut-ins in the Gulf of Mexico in the face of hurricanes Gustav and Ike last September, output levels then were still lower than this October’s by nearly 15%. Meanwhile, Alaskan output, at 696,000 barrels per day, slipped from last October by 2.8% but rebounded from this summer’s lows of less than 600,000 barrels per day.

The October production figures continue to detail the industry’s success story in the Gulf of Mexico, particularly the deep waters, as well as the way new technologies have helped bring on new production both offshore and onshore.

—API Statistics Manager Ron Planting

On the demand side, gasoline deliveries for October showed their first decline since May, dropping 0.5 percent from last October’s delivery surge that followed hurricane-related supply interruptions of September 2008. However, had deliveries a year ago followed a pattern more in line with historical patterns, API estimates that this year’s gasoline deliveries for October would have shown their fifth year-to-year increase in a row—though perhaps by only about one half of one percent.

Distillate deliveries’ year-to-year declines, which had been moderating in recent months, returned to the double-digit range in October, with an 11.4% drop from a year ago. Even if there had been a more normal delivery pattern last year, this October’s decline still would have likely averaged some 7%, according to API. Economic indicators continue to suggest that demand for diesel-powered freight traffic is down substantially. The Federal Reserve Board’s industrial production index, for example, was flat for October and was still running more than 7% below year-ago levels.

Comments

HarveyD

More local production and reduced consumption should translate into less importation?

Will this trend carry on into 2010/2011?

SJC

Lots of acres under lease and biofuels with hybrids could reduce oil imports. This should be our national priority, to reduce oil imports 20% by 2020.

HarveyD

SJC:

Wouldn't be surprised that USA will do even better than -20% Oil imports by 2020.

Combined local biofuel + more electrified vehicles + more efficient ICE vehicles + improved public mass transportation could reduce Oil imports by as much as 30% by 2020.

A progressive fuel tax could reduce consumption by another 10+%.

ToppaTom

After the December OPEC meeting, Saudi Arabia might rebel and increase production independently, sending prices down toward $50 to inhibit the development of nuclear weapons in Iran, by causing a dramatic drop in Iranian revenues and create a moderate government plus slow the development of alternative technologies.

Not likely.
But if they do, a real opportunity to increase gas taxes.
Not likely.

But we they do - have high gas taxes helped Europe?

SJC

Less imported oil has national security implications. Fewer U.S. dollars would be going out of the country to people that could mess with us. Even though China and India are using more oil, it would be good to take the demand pressure off the market as much as possible.

HarveyD

Without technological changes + current world financial mess, world oil consumption would have gone up between 2% and 4% every year.

What will happen after 2011/2012 when the world slowly pulls out of the Banks & Wall Street created financial crisis?

Will vehicle electrification + improved ICE + alternative fuel be introduced fast enough to offset normal/forecasted liquid fossil fuel consumption growth?

SJC

This should be an ALL fronts effort. There are lots of good ideas to reduce imported oil but some are more cost effective than others. If we take a medium to long term view, may ideas can be implemented to put us on a better track to the future.

I tend to believe that going with the ideas that are most likely to be adopted and succeed is our best option. People fuel their cars with liquid fuel. To hope that there will be 50 million EVs on the road in 10 years may not be realistic. That does not mean that we should not do EVs, but the outcome projected should be viable.

There CAN however be 50 million FFVs that can run E85, M85 or a mix by 2020. It costs only a few hundred dollars per vehicle to mandate that ALL cars sold after 2012 have to be FFV. This is something that we should have done years ago, but politics and lobbying got in the way.

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