U.S. oil production tops imports for the first time since 1995

AP

For the first month in nearly two decades, the U.S. in October extracted more oil from the ground than it imported — an important milestone for a nation seeking to wean itself off foreign oil.

The shift could lead to more jobs in the United States, lower the trade deficit and insulate the economy from foreign crises that send oil prices rising.

But it also speaks to deeper, underlying changes in the way Americans use oil, as consumers limit what they pay. The resulting decline in consumption has meant the country must buy less oil to meet its needs.

Not since 1995 has the United States produced more crude oil than it imported.

For several years, domestic production has been on the rise, with net imports declining. But data released Wednesday by the Energy Information Administration, the statistical wing of the Energy Department, show crude oil production topping 7.7 million barrels per day.

White House officials said President Barack Obama’s efforts to boost fuel efficiency for cars have helped to reduce demand for gas, lessening the need to import foreign oil.

Officials said requiring auto companies to make cars that run on less gas has gone a long way toward realizing Obama’s goal of curbing global warming. They also credited the president with promoting drilling on federal lands and offshore to encourage more U.S. energy production.

“Taken together, these factors not only reduce our dependence on foreign oil, but work to reduce overall carbon pollution in our communities,” said White House spokesman Jay Carney.

But on the production side, energy experts and the oil industry say the higher volumes of oil coming out of the ground come despite Obama’s policies. They say Obama has made it harder, not easier, to produce oil on government land. The U.S. still exports far less oil than it imports.

“It’s a very positive sign — enormously positive,” said Philip Verleger, an independent U.S. energy analyst. “But energy policy has not been a help, it’s been a hindrance.”

Although domestic oil production has been growing since Obama took office, most of the extra production has been on private and state lands.

Oil analysts said that high oil prices worldwide have made it lucrative for oil companies to invest in new wells even as easy-to-drill areas become scarce and companies must resort to more expensive technologies to unearth oil in North Dakota and in deep-water wells in the Gulf of Mexico.

The October figures will be revised as more final data becomes available. But based on the size of the gap between net imports and production — 170,000 barrels per day — administration officials said they were confident the trend will hold true.

Oil industry advocates said they hoped the shift would encourage the administration to increase production on federal lands, now that the vision of a United States that can rely more heavily on its own energy resources is coming into view.

“For most of our history, it’s been scarcity,” said John Felmy, the chief economist for the American Petroleum Institute. “It’s completely changed.”