The 10 Most Oil-Rich States
The U.S. energy industry is booming. As new technologies make oil easier and more affordable to extract, the United States is poised to become the world’s leading oil producer as soon as 2015, according to a 2013 study by the International Energy Agency. At the same time, proven oil reserves — the estimated quantities of oil that can be extracted under existing conditions — have also risen. In 2012, the U.S. had more than 30.5 billion barrels of proven oil reserves, up 15% from the year before.
Ten states accounted for nearly 80% of the U.S. proven oil reserves as of the end of 2012. Texas was the state with the most proven reserves, totaling more than 9.6 billion barrels of oil, or close to a third of all U.S. reserves. Based on the U.S. Energy Information Agency (EIA) data on proved oil reserves, these are the most oil-rich states in the country.
Unsurprisingly, the states with the highest totals of proven reserves are also among the states producing most oil. Of the 10 most oil-rich states, all but one were also among the states with the most production activity as of 2013. Together, these 10 states accounted for more than 2 billion of the 2.7 billion barrels of oil produced last year. Offshore drilling, not attributable to any state, accounted for much of the production not coming from these states.
In addition to being oil-rich, these states also refine the vast majority of oil in the country. Of the nation’s 139 operating refineries, 90 are in the states with the most oil. Together, the nation’s refineries have a refining capacity of nearly 18 million barrels per day. Three of the nation’s most oil-rich states — Texas, California and Louisiana — together have a refining capacity of more than 10 million barrels per day.
Technological advancements in horizontal drilling and hydraulic fracturing, commonly called fracking, have allowed oil companies to access oil shale formations that were previously unreachable. In the Permian Basin, for example, traditional oil wells began to run dry as early as 2000. Using new technologies, the Permian Basin accounted for nearly 25% of total U.S. oil production as of late last year. “Without [horizontal drilling and hydraulic fracturing] much of the ‘unconventional’ production wouldn’t be economic,” explained Don Burch, senior geophysical advisor at Noble Energy.
In addition to new oil fields, companies have increased reserves via extensions to existing and already-producing oil fields. Extensions accounted for nearly half of the increase in U.S. reserves between 2011 and 2012.
As a result of the oil boom in these states, jobs in the mining and logging industries, which include oil and gas extraction, have increased in all these states. Notably, the number of mining and logging industry jobs in North Dakota jumped nearly 60% in 2011 and 47% in 2012.
However, the existence of substantial amounts of oil in a state does not necessarily guarantee work opportunities. California, Alaska and New Mexico had unemployment rates above the national rate in June 2014. Still, an active oil industry can be beneficial to a state’s economy. In Colorado, the nation’s eighth-most oil-rich state, for example, “the oil industry employs 110,000 full time workers [and spends] $30 billion, yielding $1.6 billion in state tax revenue each year,” Burch said.
To identify the most oil-rich states, 24/7 Wall St. reviewed data on proved oil reserves from the EIA. Reserves figures are as of December 31, 2012, the most recent date for which such data are available. We also reviewed EIA data on natural gas and coal reserves, as well as per capita energy consumption figures, for 2012. Per capita consumption is expressed in British thermal units (BTU). Crude oil production figures from the EIA are for 2013. Figures on the number of operating refineries and their capacity are also from the EIA and are current as of January 1, 2014. Unemployment data and jobs figures are from the U.S. Bureau of Labor Statistics.
These are America’s most oil-rich states.