Here's an eye-catching lede from the AP's Jonathan Fahey: "U.S. oil output is surging so fast that the United States could soon overtake Saudi Arabia as the world's biggest producer."

Michael S. Williamson/Washington Post

It's a great story, but it could use a bit of dissecting. There's no question that U.S. oil output has surged in recent years. But we're not quite ready to catch up with Saudi Arabia just yet. There's a tiny asterisk in here that warrants a fuller explanation.

First, here's a chart (pdf) from the Energy Information Administration looking at crude oil production around the world. Notice that United States is still far below Saudi Arabia:

U.S. crude oil production has increased dramatically in the past year, thanks to a drilling boom in places like North Dakota. That's helped the U.S. reduce its imports. But we're not likely to catch up to Saudi Arabia anytime soon. What's more, Saudi crude is generally cheaper and easier to produce than America's "unconventional" oil from shale rock. That gives the Saudis enormous sway over oil markets.

So what is the AP referring to? The trick is to look at what the EIA calls "total oil supply." This isn't just crude oil. It also includes natural gas liquids, biofuels, and the processing gains from refineries. On this score, yes, the United States is catching up with Saudi Arabia. Here's a chart from James Hamilton:

Components of total U.S. oil supply, monthly, January 2000 to March 2012, in millions of barrels per day. Blue: crude oil including lease condensates; purple: refinery processing gain; brick: natural gas plant liquids; yellow: other liquids. Data source: EIA.

The EIA forecasts that the United States will produce an average of 11.4 million barrels per day of "crude oil and other hydrocarbons" next year. That's compared with 11.6 million barrels per day of "crude oil and other hydrocarbons" from Saudi Arabia. 

So which metric should we care about? Some energy experts, like Chris Nelder, argue that we should mainly focus on crude oil, since that's by far the most important energy source for powering the global economy. Most of our cars still run on gasoline. And gasoline depends on crude oil.

Natural gas liquids, by contrast, largely consist of propane and ethane. Those are quite useful for the petrochemical industry and for home heating. But we can't really fuel our cars with natural gas liquids. They don't have nearly the same importance as crude oil in that regard. (Technically, we could run our cars on propane, but the infrastructure isn't in place.) Biofuels, meanwhile, are useful but fairly energy-intensive to produce. They don't pack nearly the same punch as oil.

Now, to be clear, the recent surge in oil and natural gas production in the United States is a big deal. All that drilling could support thousands and thousands of jobs and bolster the U.S. economy. A rise in domestic oil production can help the United States shrink its trade deficit (though it won't likely affect the price of gasoline much). And, of course, all those new fossil fuels, when burned, will increase global warming—making it extremely difficult to avert a 2°C rise in temperature, with all the dangerous and unpredictable effects that will bring. That stuff matters.

But analysts and politicians often fixate on oil dependency precisely because our whole transportation system and economy are utterly reliant on crude oil. And as far as crude is concerned, Saudi Arabia is still the world's most important producer.