Gains uneven as U.S. oil and gas industry steps up exploration and production


Hydraulic jet pumps facilitate well testing and pumping operations.

In recent posts, we've looked at a number of the positive economic effects that have stemmed from increased domestic oil production. Last week, we looked at a report from the U.S. Energy Information Administration (EIA), which asserted that by the end of next year, the pace of American oil production will exceed the rate of imports for the first time in February 1995.

This shift indicates that businesses in the United States will be able to enjoy an ongoing competitive advantage in the form of lower domestic energy costs and increased investment by the oil and gas industry.

However, some observers may be curious about where the increase in production is taking place. The EIA reports that U.S. oil production has risen by more than 25 percent since 2007. But when the figures are broken down at the state level, it is clear that gains in production have been uneven across the country.

Some states up, others down as industry digs deeper to find new resources

California and Alaska have both seen their production continue long-running declines in recent years. Alaska's production dropped almost 30 percent in five years, causing the state to lose its position as America's number two oil producer. It is currently ranked fourth. Meanwhile, California's output has declined at a slower rate. Although the state briefly took the number two spot from Alaska, it lost that position to North Dakota in 2012.

North Dakota's oil output, which hovered around 120,000 barrels per day in 2007, increased by a striking 435 percent to reach 663,000 barrels per day by the end of 2012. Colorado also posted a considerable increase of 86 percent during that time period. However, its production – approximately 132,000 barrels per day – remains relatively low compared to that of America's biggest producers.

Texas continues to lead the nation in oil production, having put out more than 1.9 million barrels in 2012 after posting an increase of more than 80 percent over the course of the previous five years. Almost half of all the drilling rigs currently exploring for oil and gas in the United States are based in Texas.

This level of activity has had a significant positive effect on the state's economy. According to a report from the Texas Independent Producers and Royalty Owners Association (TIPRO), more than 380,000 people work in the state's oil and gas industry.

In order to maintain and expand the gains being made in Texas and other states, the industry will need to continue implementing new technological advances. One key solution is the hydraulic jet pump. This powerful piece of equipment can be used to rapidly conduct drill stem testing and initiate production at newly completed drilling sites, or optimize operations to improve recovery rates at established wells.