U.S. oil production dropped to the lowest level in a decade during 1987, with average daily production falling by more than 4.5 percent from the year before, the American Petroleum Institute said yesterday.
Despite a modest increase in oil prices during the year and a major increase in production in Alaska, total production by yearend fell almost 400,000 barrels a day below the average for 1986, the trade association said. Crude oil output in the lower 48 states plummeted to the lowest level since 1952, the trade association said.
By the end of the year, daily production had dropped 10 percent from average production in 1986, falling by more than 900,000 barrels, said the association.
The association warned that reduced production, increased consumption and declining exploration for oil are pushing the United States into ever greater reliance on foreign oil, which is subject to disruption. U.S. imports of petroleum now account for about 40 percent of domestic consumption, the highest level since the end of the 1970s.
Although major oil and gas companies have recently budgeted additional funds for exploration, "I think that reflected some optimism as to what's going to happen to prices in 1988," said Edward H. Murphy, director of finance, accounting and statistics for the oil industry trade group. "The question of what is going to happen to drilling is a question of what is going to happen to prices."
He also noted that many of the companies that were increasing expenditures for exploration and development were focusing on sites outside the United States.
After peaking at 91,000 in 1981, the estimated number of exploratory oil and gas wells fell last year to fewer than 35,000, a drop of more than 10 percent from the previous year, said the association. While exploration and production were falling, however, consumption accelerated at an estimated annual rate of 2.5 percent, the association said. Until 1986, consumption had been falling.
The institute said it believes several steps are necessary to increase U.S. oil and gas exploration and production, including repeal of the windfall profits tax, improved access to sites in Alaska and off the coast of Alaska and California, and decontrol of natural gas prices, said association vice president Michael E. Canes. In addition, he said that the issue of oil import controls should be "on the table" for discussion.