News Story

Oil Boom on Private Land Contributes to Low Gas Prices

U.S. oil production up 63 percent overall, but down 16 percent on federal offshore lands

The state of Michigan is enjoying low gas prices (and on Nov. 30 had the lowest prices at the pump in the nation), something analysts are saying can be attributed in part to the increased production of oil in the U.S.

Crude oil production in the U.S. has increased 63 percent from 5.4 million barrels a day in 2009 to 8.7 million barrels a day in 2014. That’s the most production on U.S. soil since 1986, according to the Energy Information Administration.

That increase in domestic oil production can be attributed to hydraulic fracturing, commonly referred to as “fracking.” That occurs in drilling when a high-pressure water mixture is shot into rock to release the gas inside.

“For all intents and purposes, today’s oil and gas drilling is fracking,” said Daniel Kish, the senior vice president of policy for the Institute for Energy Research, a free-market think tank that researches the energy market.

Michigan has seen a slight increase in oil production. The state produced 17,000 barrels per day in 2009 and that increased to 20,000 barrels per day in 2014, which ranked it 18th overall in the country.

North Dakota has seen its oil production increase from 218,000 barrels per day in 2009 to 1 million barrels just five years later. Texas has nearly tripled its oil production from 1.1 million barrels per day in 2009 to 3.2 million barrels per day in 2014.

Kish said the increases in North Dakota and Texas are due to a combination of horizontal drilling and hydraulic fracturing.

“Rock that used to be avoided because oil and gas would not flow through it now is leading the charge of new U.S. energy supplies,” Kish said in an email. “The great thing is that this triumph of engineering and human know-how is making the U.S. more energy secure while creating new energy wealth, lower prices for consumers and more investment.”

Yet, the amount of oil produced on federal offshore lands over that same timespan has decreased 16 percent from 61,000 million barrels a day to 51,000 million barrels a day.

“The ironic thing is that because of private land and property, all this new energy has been created on the watch of the most anti-oil, gas and coal president we have ever had —President Obama,” Kish said. “The largest increases in history of oil and gas production are happening because the government doesn’t own the land. ... People do.”

The Sierra Club, an environmental group, has supported banning fracking in Michigan.

The national office of the organization acknowledged an email seeking comment but didn’t respond.