Yes, U.S. Oil and Gas Production Is Increasing, but Energy Efficiency Is Still the Number One Resource

Blog Post | June 19, 2012 - 9:30 am
By Steven Nadel , Executive Director

A variety of recent articles have trumpeted how U.S. oil and gas production is up.  For example, Daniel Yergin, in a New York Times op ed, notes that U.S. oil production has increased 1.6 million barrels per day since 1998 and that a further 0.6 million barrel increase may be possible this year.  He also notes how shale gas is now 37% of U.S. production, up from 2% a dozen years ago.  And he quotes President Obama as saying that shale gas development had by 2010 supported 600,000 jobs (this includes direct, indirect and induced jobs). EIA notes that U.S. oil production in the first quarter of 2012 is at the highest level since 1998.  These increases are largely driven by advances in hydraulic fracturing or “fracking,” allowing “tight oil” and shale gas to be profitably extracted. 

While hydraulic fracturing goes back to the 1860s, and the U.S. government and the Gas Research Institute conducted critical research in the 1970s, the modern shale gas boom was made possible by a new hydraulic fracturing system developed by Mitchell Energy in 1997.

U.S. energy efficiency has also increased substantially since 1997.  According to EIA, in 2011 the U.S. consumed 2,300 fewer Btu per dollar of GDP than in 1997—a 24% decline.  These energy use reductions amount to the equivalent of 14.5 million barrels per day, dwarfing the increase in oil production and the amount of shale gas we currently produce.

Contributions Since 1997 of Domestic Oil, Gas and Energy Efficiency Resources to Meeting U.S. Energy Needs

Going forward, EIA, in their preliminary Annual Energy Outlook 2012, predicts that U.S. shale gas production will increase over the 2012–2035 period by the equivalent of nearly 3 million barrels of oil per day and U.S. oil production will increase by 0.24 million barrels per day.  In comparison, a January 2012 study by ACEEE on long-term energy efficiency potential estimates that by 2050 we can use energy efficiency to reduce U.S. energy use, relative to a business-as-usual basecase, by 42–59%. In 2035, the midpoint estimate is equivalent to 17.5 million barrels per day. And this study further estimated that these energy efficiency investments and their resulting energy bill savings will support 1.3–1.9 million jobs in 2050.

So yes, recent increases in oil and gas production are important for the United States.  But we should not lose sight of our #1 energy resource over the past several decades and well into the future: energy efficiency.