The United States is on track to produce more domestic crude oil than it imports from overseas sources by the end of the year, according to the U.S. Energy Information Administration’s (EIA) March energy report. When it happens, it will be the first time since February 1995 that domestic crude production has outstripped imports.
Here is EIA’s chart showing the long-term trend.
According to the report, increased shale oil production in Texas and North Dakota gets the credit for this shift, with some estimates suggesting that domestic sources will be out-producing imports by as much as two million barrels per day by the end of next year. What’s more, monthly U.S. crude production could even reach eight million barrels per day in 2014, highs not seen since 1988.
In theory, this could mean lower prices for consumers, as domestic production involves lower transportation costs and generally less price fluctuation. But whether or not that translates to actual savings for everyday Americans remains to be seen.
But, either way, this just addresses supply. Demand for fuel oils has never been higher, and some worry that by tapping more domestic sources the U.S. is simply deepening its societal reliance on oil, rather than working to develop alternative energy sources.
What do you think? Certainly, prices at the pump aren’t budging, so is this increased U.S. domestic production a good thing for the economy long-term? Will it really make a difference to most Americans?