In January, the US Energy Information Administration (EIA) reported a monumental achievement in the American oil industry: domestic crude oil production reached an unprecedented peak in September 2023, hitting 13,247,000 barrels per day. This milestone, however, appeared to fly under the radar despite its global significance, as it represented the highest level of oil production ever recorded by any country in a single month. The momentum didn’t stop there; US oil production continued its upward trajectory, surpassing this record in November and again in December, the latter being the most recent month with complete data.
The surge in production to 13,319,000 barrels per day in November likely marks the beginning of a trend, as evidence suggests this record may have been eclipsed during the early months of 2024. This increase is attributable to enhanced efficiency and technological advancements, enabling producers to extract more oil from each wellbore. Remarkably, this production boom has occurred alongside a significant reduction in the active rig count, which has decreased by over 25% in the last 15 months—a phenomenon not previously seen in the modern era of the US oil industry.
This record-setting performance in September 2023 came exactly 15 years after American crude production had plummeted to its lowest point since 1943, during World War II, when it was just 3,974,000 barrels per day. By contrast, the State of Texas alone produced nearly 2 million barrels per day more than this figure 15 years later. This turnaround was primarily fueled by the shale revolution, which began in October 2008 with the drilling of the first successful horizontal oil well in the Eagle Ford Shale of South Texas by Petrohawk Energy. Initially targeting dry natural gas, the company was surprised to discover a significant flow of light brown sweet oil.
The subsequent years saw rapid advancements, with successful horizontal drilling extending to the Permian Basin of West Texas. By 2012, Texas’ oil production had tripled from its 2008 levels. As of November 2023, Texas alone was producing 5,657,000 barrels per day, an output that would rank it as the fourth-largest oil-producing nation globally if it were an independent country.
Despite the Biden administration’s regulatory efforts to curb the industry’s growth through federal regulations and executive orders, U.S. oil production has continued to expand. This resilience can be attributed to a combination of factors. Geologically and geographically, the most productive shale regions, such as the Eagle Ford and Permian Basin, are situated in areas with minimal federal land ownership, thus falling under state regulatory jurisdiction. Furthermore, American legal frameworks limit presidential influence over the industry, particularly on non-federal lands, restricting federal interference to peripheral actions like delaying pipeline approvals or halting new LNG export permits.
Another pivotal moment came in December 2015, when then-President Barack Obama signed an omnibus spending bill that included a provision repealing the 1975 ban on U.S. crude oil exports. This legislative change, unbeknownst to many at the time, significantly propelled the shale industry forward by allowing producers to export light, sweet crude oil, which was challenging to process domestically due to refinery configurations.
Presently, the United States stands as the world’s leading producer of oil and natural gas, enjoying a level of energy security unparalleled in its history. This status is fortified by an industry that is operating more efficiently and innovatively than ever before, reducing reliance on foreign oil and enhancing domestic energy independence. The future of U.S. energy dominance seems secure, notwithstanding potential regulatory challenges, as the industry’s track record demonstrates a consistent ability to navigate and overcome political and regulatory hurdles through market dynamics and technological innovation.
