Texas is now producing more oil than Norway, a country whose riches have been directly tied to its supplies of black gold.
Norway produced about 1.4 million barrels per day in January, down from historical rates of more than 3 million barrels per day at the turn of the century, said Torbjorn Kjus, a senior oil analyst for DNB, Norway’s largest financial services group, at an energy conference in Houston Wednesday.
As Norwegian production declines, its government is encouraging the development of its energy technology for markets such as Houston, where it is sponsoring the third Norwegian Finance Day at the Federal Reserve Bank.
Texas oil production meanwhile has been steadily growing, reaching more than 1.9 million barrels per day in January 2012 and accounting for the lion’s share of U.S. domestic production. Texas produced about 2 million barrels in the late 1980s. Suffering from rock bottom oil prices, that rate dropped to about 1.2 million barrels per day in 2005 and hovered there until about 2010. Then the shale boom began to spread its wings.
Texas is the engine behind U.S. domestic production. The country currently produces more than 2.1 million barrels per day, according to the U.S. Department of Energy.
Kjus said that the growth of the U.S. market will impact international prices, as domestic crude begins to replace imported crude. Currently, the U.S. imports about 6 million barrels per day of crude oil, down from its mid-1980s high of 12 million barrels per day.
While the U.S. currently has a ban against the export of its domestic crude, Kjus said that as U.S. refineries develop the capability of processing domestic oil, U.S. demand for global oil will decrease.
“All this oil becomes available for others and that is when we will have the global effect of this story,” Kjus said.
The U.S. is estimated to have 113 billion barrels of crude reserves in unconventional plays such as the Permian Basin that could be tapped by 2025, Kjus said.
“The U.S. will be the key for international oil prices,” Kjus said.