How much oil does our country produce?

While I was in Houston, my dad mentioned predictions of the United States becoming the world's #1 oil producer within a few years. I laughed, for that contradicted what I had always heard: that the United States is a distant third in the world, behind Russia and Saudi Arabia, and our production has been declining since the early 1970's. Not so, my dad said. Russia, Saudi Arabia, and the United States are all very close in their production numbers, and with the current production boom going on in our country, we may very well become #1 soon. No, I said, Russia and Saudi Arabia produce about 10 million barrels per day, and the United States produces about half as much. Not at all, he retorted, the United States also produces about 10 million barrels per day.

We were at my uncle's house at the time, and it wasn't until later that day, after having burned through about a tenth of a barrel's worth of gasoline to return home, that we searched the Web to see who was right. What we found illuminated the obscurity of oil production statistics.

The first page we pulled up was the relevant Wikipedia article, List of countries by oil production. It has a chart clearly confirming what my dad said earlier: Russia, Saudi Arabia, and the United States are bang-bang-bang in oil production, with the United States producing about 9.7 million barrels a day. My dad was right. No way! I thought. I did my own search and found another page, one from the EIA (Energy Information Administration) showing the classic chart of declining production in our country. The units are different—the EIA chart is figured in barrels per year rather than barrels per day—but the result is vastly different even after doing the conversion. According to the EIA chart, the United States currently produces about 5.6 million barrels of oil per day. That's 4.1 million barrels shy of the figure in the Wikipedia article, and contradictorily shows I was right. What's going on?

There are two major differences in how the two figures are calculated. The Wikipedia article's more generous figure of 9.7 million barrels per day includes something called refinery gains, which is the increase in volume that naturally occurs when crude oil is refined into separate chemicals. Forty-two gallons, i.e. one barrel, of crude input gets refined into an extra gallon or two of output, and so some oil production accounting includes that gain as part of what a country produces, even when the crude oil that's inputted into the process is imported.

But the bigger difference in the 4.1 million barrels per day discrepancy is the inclusion of natural gas liquids. These are hydrocarbons, such as methane and propane, that are in liquid form at underground pressures but gaseous form at atmospheric pressure. Some oil production statistics include natural gas, and some don't. Whether it gets included or not determines whether the United States is a distant-third oil producer that's been on the decline for four decades or else is currently booming and subsequently closing the gap with the world's top two oil-producing countries.

This is something we all ought to consider whenever we hear politicians, economists, and business analysts casually tossing around oil production statistics. Whether natural gas ought to be included in oil production stats depends upon the context of what you're talking about. For example, natural gas is proving to be a great fuel for generating electricity cheaply, but you're not going to see cheap gasoline or airfare anytime soon because of a methane boom.