You'd be surprised how many people tend to overlook bad news.
This morning, this fact was reiterated for me. I had gotten into a disagreement with a friend of mine. She was born and raised in Alaska.
It was a simple conversation. . . but what started out as us catching up with one another quickly escalated.
Our conversation turned to the topic of Hurricane Ida. I remarked that it felt very late in the hurricane season. The Atlantic hurricane season officially ends with the month of November. The last I had heard, Ida was moving into the Gulf of Mexico and companies are beginning to evacuate their workers.
That makes perfect sense, right? The obvious result would be for output in the Gulf of Mexico to be disrupted.
The topic soon changed to U.S. oil production in general.
Unfortunately, my friend falls into the category of those who "overlook bad news" — especially when it comes to her home state's problem with oil production. I'm still amazed to find people that have no idea about peak oil.
She didn't realize was how bad things have gotten for some places. . .
The Backside of Peak Oil
It's no secret that production in the United States has been tumbling down the backside of peak oil for the last three decades.
I haven't met anyone that believes U.S. production will ever return to its 1970 production level.
Believe me, peak oil in the U.S. isn't a myth. It's about as real as it gets.
In fact, it gets downright ugly when you look at our top oil producers.
Let's take a closer look. . .
Roughly half of U.S. oil production comes from just three states: Texas, Alaska, and California. When I said earlier that most people overlook bad news, I meant it.
In the last 29 years, Texas has managed to increase year-over-year oil production twice. Since 1981, production has fallen by 57%. As you can see from the EIA's data, record oil prices just weren't enough to save production.
My friend's home state isn't faring much better. Alaska's North Slope oil production — which makes up 98% of the state's production — peaked in 1988. Care to know how far Alaska is down from the peak? The state's crude production has plummeted 66% since the peak.
Coincidentally, Alaska's year-over-year production declined 14% in 2006, the same year that Texas squeaked out a 2.4% increase. (For now, let's just set the ANWR debate aside. We'll save that mess for another day.)
It's the same story for California, our third-largest oil producing state.
