Lately, President Obama has been talking up the frenzy of domestic oil drilling under his watch. “Right now,” the president said in his State of the Union Address on Tuesday, “American oil production is the highest it’s been in eight years.” Technically, that’s true. But it’s worth taking a longer view. Since 1970, U.S. oil production has actually been in severe decline — and the recent boom is nowhere near enough to reverse it.

Economist James Hamilton offers some historical perspective in this new NBER paper. Thanks to new shale oil drilling in North Dakota and offshore production in Alaska and the Gulf of Mexico, U.S. production has picked up recently and is at about 6 million barrels of oil per day. But that’s still way down from 1970, when production peaked at 10 million barrels per day:

The United States has historically been able to increase oil production by finding new areas to drill. First there were Pennsylvania and New York in the 1850s and ’60s, then Ohio, then West Virginia, then big plays in Texas, the Gulf of Mexico and Alaska, and so on. Eventually, however, production from all those locations peaked and went into decline. Companies have now moved on to North Dakota and deepwater exploration.

Right now, North Dakota is the only state setting all-time records for production — in the wake of new fracking techniques for recovering oil from the Bakken shale formation. But while that development is hugely important for North Dakota, it’s modest in the larger scheme of things. “The 138 million barrels produced in North Dakota and Montana in 2010,” Hamilton writes, “is about half of what the state of Oklahoma produced in 1927 and a fifth of what the state of Alaska produced in 1988.”

Obama has also proposed opening up the Outer Continental Shelf in the Atlantic and Pacific oceans for further oil exploration, but, according to an Energy Information Administration analysis, that would boost oil production by just 182 million barrels in 2030 — again, less than Oklahoma produced in 1927.

That doesn’t mean the recent uptick in oil production has no benefit. As the EIA’s Energy Outlook 2012 noted, the recent boom is helping the United States curb its dependency on foreign crude. But that’s mainly because Americans are also reining in their oil use. The EIA projects gasoline consumption to be flat in the years ahead, thanks to new fuel-economy standards on cars and light trucks. The fact that Americans are using less oil is a key part of the dynamic here.

So what lies ahead? Hamilton’s paper is fairly gloomy about future domestic supplies. While most industry optimists expect that rising prices and new technology will help the United States — and the world — keep wringing out more oil from existing fields, history offers reasons for pessimism. Boosts in iil production has primarily been mainly by new discoveries rather than better technology. And while high prices can spur companies to boost production, they’re no guarantee that the decline can be halted or reversed — in 2010, oil was twice as costly as in 1990, yet U.S. production was still down 25 percent from 1990 levels. (Globally, meanwhile, production has plateaued since 2005.)

“Most economists view the economic growth of the last century and a half as being fueled by ongoing technological progress,” Hamilton concludes. “Without question, that progress has been most impressive. But there may also have been an important component of luck in terms of finding and exploiting a resource that was extremely valuable and useful but ultimately finite and exhaustible. It is not clear how easy it will be to adapt to the end of that era of good fortune.”