The American Petroleum Institute predicts U.S. oil import dependence this year may exceed the record 47.7% of 1977.
Ed Murphy, director of API's finance, accounting, and statistics department, said that could occur if U.S. oil production speeds its rate of decline or if the economy recovers and oil consumption rises.
Releasing API's annual statistical report, Murphy said, "The data paint a bleak picture for the U.S. petroleum industry. The evidence indicates the exploration and production sectors of the U.S. petroleum industry have entered a period of accelerated decline, while there is accelerated growth overseas."
U.S. production is now falling at a 300,000 b/d/year rate.
Murphy said, "We have no evidence there is anything on the horizon that would likely diminish this rate of decline and several reasons to suspect that it may deteriorate further.
"Drilling declined continuously in 1991 and by the fourth quarter was off by more than 25% from the low levels of the last several years. And it continues to fall.
"Likewise, seismic crew activity, a necessary precursor to exploratory drilling, has been setting record lows each month."
Murphy said low crude oil and natural gas prices are factors driving the trend, but limited access to public land and impediments posed by U.S. tax laws are also causing drilling and production to fall.
"Unless something happens to change the environment for U.S. investment, there is a substantial probability the current rate of decline will accelerate," he said.
U.S. OIL CONSUMPTION
API data show deliveries of petroleum products declined 2% to 16.648 million b/d in 1991 from 16.989 million b/d in 1990.
While deliveries in fourth quarter 1991 and last December were higher than in the corresponding periods of 1990, oil's share of total U.S. energy consumption in 1991 fell to its lowest level in 40 years-less than 41%. The record high was 48.7% in 1977.
U.S. crude production, 0.1% higher for 1991, began to decline significantly toward yearend. It was lower than 1990 in fourth quarter 1991 and in December. Fourth quarter production 7.273 b/d was the lowest in 30 years.
Total imports dropped 5.1% in 1991 after rising by more than 60% during 1985-89 and leveling off in 1990. But imports increased 10.9% in the fourth quarter and 15.2% in December, compared with the same periods of 1990.
The market share of premium unleaded gasoline declined for the second straight year. Unleaded premium accounts for 18.5% of gasoline sales, while it had been as high as 24%. Leaded regular gasoline accounted for only 3% of the market.
Petroleum consumption dropped about 350,000 b/d last year. Gasoline use was on a declining trend at the end of the year, distillate deliveries reached their lowest levels in 5 years, residual fuel oil consumption reached its lowest level since 1942, and jet fuel consumption fell 2.8%.
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