Alaska Oil Field's Falling Production Reflects U.S. Trend

On a recent day, in a Prudhoe Bay site known as Z Pad, BP contractors were trying to tap into pockets of oil that were not previously accessible. In a control room inside an oil rig, a worker sat behind a video monitor clutching a joystick that guided coiled metal tubing through an existing pipe, out the side and into the earth. The idea is to expand the underground area where the well draws its oil by creating another entry point.

"This is part of the reason Prudhoe is still around," said Gilbert G. Beuhler, a manager for BP, which operates Prudhoe Bay and other nearby fields on behalf of a group of owners. "This is our future at Prudhoe -- going for these more peripheral, thinner parts of the reservoir."

As production of the most lucrative, easy to pump grades of oil declines, the company is targeting heavy oil, which has the consistency of molasses and was once considered too costly to extract. In parts of the field, new drilling targets underground areas holding this type of oil.

Against this backdrop, the Bush administration and congressional Republicans are pushing legislation that they say is designed to increase domestic oil production. The House last month approved billions of dollars in incentives to encourage exploration and drilling. Congress has approved a budget resolution that assumes drilling in Alaska's Arctic National Wildlife Refuge, but the two chambers still must pass additional legislation before it can begin. Lawmakers from both sides of the political aisle have been calling for energy plans that they say will shake dependence on foreign oil, contending national security is at risk.

"Our dependence on foreign oil is a direct threat to national security," Sen. Ted Stevens (R-Alaska) said at a recent news conference as he pushed to allow drilling in the wildlife refuge. "People fail to realize that our dependence on rogue states and militant nations makes us weak."

But analysts said that none of the congressional plans on the table would come close to shaking U.S. dependence on foreign oil. They said companies already are doing what they can to boost sagging production at Prudhoe Bay and other big fields.

Steps could be taken to help reduce consumption, perhaps easing somewhat the imbalance between the demand for oil and the supply. But in the long run, geologists say, the only question is how rapidly production will fall.

Few large-producing oil fields remain to be tapped in the United States. U.S. geological officials believe the best prospect to be about 60 miles east of here in the wildlife refuge. But even with that oil, imports are forecast to increase significantly.

"A huge emphasis on drilling in the most favorable areas could reverse the production declines only temporarily," said Dave Houseknecht, a geologist with the U.S. Geological Survey. "If the nation continues to increase its oil consumption, we are going to continue to need imported oil, and increasing amounts of imported oil, regardless of what we do domestically."

The bulk of the remaining oil reserves are in the Middle East. Barring the advent of alternative energy sources or a significant decline in consumption, analysts said the United States will have little choice but become increasingly reliant on the very countries lawmakers say they are trying to gain independence from.

The United States is the world's third largest oil producer behind Saudi Arabia and the former Soviet Union. But the United States holds less than 2 percent of the world's reserves -- the amount left in the ground.

Imports now account for 58 percent of net oil consumption, according to the Energy Department's Energy Information Administration. In another two decades that number is forecast to climb to 68 percent.