Oil is an integral part of human life. Though it is an exhausting type of energy, mankind is still relying heavily on it as a source of energy to run their daily lives. A barrel of oil extracted from the earth that is used is gone forever. From the time of inception, the production of oil has gone up steadily due to the adoption of modern technologies to extract and refine it. No doubt, this is a remarkable achievement that is contributing immensely to human progress.

Brief Picture of Its Evolution

Oil development happened not because of technological improvements alone. The oil industry originated in 1859 in the Oil Creek District of Pennsylvania. The production reached its maximum in 1874, and it again peaked in 1891. Revival of production happened again in the 1920s due to the secondary and tertiary recovery methods developed then. But it never reached the level of production that occurred in the 19^th century.

Today the oil production in the U.S. is less than one-eighth of what was produced in 1891. In spite of the latest technology and the price level five times higher, it is an astonishing phenomenon. But the surprising element is that in the neighboring states, Ohio and West Virginia, production peaked in 1900. For the total production of the U.S., the decline of production in certain states was compensated by other states.

Appalachian fields’ production decrease did not affect U.S. production in the 20^th century. This was mainly due to the utilization of the new production areas like Illinois, Indiana, Kansas, Nebraska, and the four-corner states of the American Southwest, etc., that displayed a steady peak in oil output. Later when it showed decline, another four states—California, Oklahoma, Texas, and Louisiana—emerged and turned to be most productive. The increase of production in these times is not due to the introduction of new technologies but to finding new places of oil reservoirs.

Present Production

New technological advancement that helps to free oil from shale and other tight formations are bringing forth considerable excitement in the industry. This has resulted in notable production gains in areas such as North Dakota and Texas. This is even though the initial euphoria in production will not be there in later stages as it will decline within two years, and it may go up to 80 percent.

The story is different in the world oil production scenario when U.S. production today is far below compared to its track record 40 years ago. World oil production increased 33 percent between 1973 and 2010 as a result of exploiting the stock of new areas. The North Sea and Mexico are part of these new areas, and their contributions to world production rose from 1 percent in 1973 to 13 percent in 1999. But the situation has now changed; the production in the North Sea has fallen down to half of its 1999 level, whereas Mexico went drastically down 25 percent from its highest in 2004.

Coming Days in Oil Production

Oil production continues to increase in central Asia, Africa, and Brazil. It helped to balance the decline in domestic production. Now we see a further surge in U.S. production these days due to the onslaught of new fields and new technology. Also, adoption of technology in world production is also showing a steep increase. But we should explore new possibilities like solar energy, wind energy, and other alternate energy sources to counter the depleting source of oil. Clever and judicious energy policy is the need of the century. It is very important because doubling in the real price of oil is resulting in a significant burden on the oil-consuming economies.