Petroleum in the United States
The United States is the largest producer of petroleum in the world. Petroleum has been a major industry in the United States since the 1859 Pennsylvania oil rush around Titusville, Pennsylvania. Commonly characterized as "Big Oil", the industry includes exploration, production, refining, transportation, and marketing of oil and natural gas products. The leading crude oil-producing areas in the United States in 2023 were Texas, followed by the offshore federal zone of the Gulf of Mexico, then North Dakota and New Mexico.
The United States became the largest producer of crude oil of any nation in history in 2023. Natural gas production reached record highs. Employment in oil and gas extraction peaked at 267,000 in March 1982, and totaled 199,500 in March 2024.
Despite petroleum's many uses from its large scale production, it comes with issues surrounding the environment and human health. Oil spills are a source of pollution and there is heavy water usage for oil production. Use of petroleum products generates greenhouse gas emissions.
Industry structure
The United States oil industry is made up of thousands of companies, engaged in exploration and production, transportation, refining, distribution, and marketing of oil. The industry is often informally divided into "upstream", "midstream", and "downstream". The industry sector involved in oil exploration and production is for all practical purposes identical with the sector exploring and producing natural gas, but oil and natural gas have different midstream and downstream sectors.Majors
The term major oil company has no formal definition, but usually refers to a large vertically integrated company, with operations in all or most of the industry phases, from exploration to marketing. Many majors have international operations.The largest of the majors are sometimes called supermajors. This term is often applied to BP, Shell, Exxon Mobil, Chevron, and Total, all of which operate in the US. These supermajors greatly contribute to climate change and the world's carbon footprint. These companies make up 23% of the cumulative global carbon footprint and 35% of the global carbon footprint when it comes to petroleum products.
However, the oil supermajors ignore and deny their impact on climate change. Since the 1970s, for the American Petroleum Institute, large oil companies have been aware of their impact on global emissions. History of Science research fellow Geoffrey Supran said, "The takeaway message across all of our work is that over and over, ExxonMobil has misled the public about climate change by telling the public one thing and then saying and doing the opposite behind closed doors".
In more recent years, supermajors have changed their public opinions from blatant climate denial, by changing the language they use when making public statements with tactics such as greenwashing.
For example, ExxonMobil has made claims to be carbon neutral by 2050, however they have taken no steps to do so and blames the public. Chief executive of ExxonMobil Darren Wood says "The people who are generating those emissions need to be aware of and pay the price for generating those emissions. That is ultimately how you solve the problem.", putting accountability on oil users instead of the oil companies. Other companies have done a similar thing; publicly showing support against climate change and emissions and their plans which shape the way the public views climate change due to their immense power. BP, for example, is the company that popularized the term carbon footprint, which Mark Kaufman, former park ranger and now climate journalist, has argued is misplaced blame.
Independents
An independent is a company which has all or almost all of its operations in a limited segment of the industry, such as exploration and production, refining, or marketing. Although most independents are small compared to the majors, there are some very large companies which are not vertically integrated, and so are classed as independents.Service companies
Service companies contract to oil companies to perform specialized services. Examples are companies that do well logging, seismic surveys, drilling, or well completion. There are innumerable small oil producers whose aggregate crude oil production exceeds the aggregate production of major crude oil companies.In 2009, the production owned by the top ten companies was 52% of total US oil production.
Exploration
Exploratory drilling, seismic and other remote sensing techniques are used to explore for and find new hydrocarbon resources. Satellites, remote-sensing devices, and 3-D/4-D seismic technologies are some of these technologies. Smaller "slimhole" drilling rigs are able to drill smaller exploratory wells to reduce the size of the impacted area.Each year, tens of thousands of wells are drilled in search of oil and gas in the U.S. In 2009, 36,243 wells were drilled.
Production
Top oil fields in the U.S.
Of the top oil fields mentioned above, four of the ten are on Native land. The Permian fields in Texas are on Comanche, Kiowa, and Cheyenne-Arapaho land. The Bakken oil field in North Dakota is on Mandan, Hidatsa and Arikara land. The Kuparuk oil field in Alaska is on Inupiaq land, and the Midway-Sunset oil field is on the Chumash land. According to Steve Lerner, most areas where oil fields are located are considered sacrifice zones and the people that live there expendable.Associated gas
Most modern oil fields are developed with plans to utilize both the oil and the associated gas. Associated gas is a by-product of petroleum extraction which is a combination of different greenhouse gases such as methane and carbon dioxide. Due to its flaring during production, it contributes to climate change and releases those gases into the air. Since oil is historically the higher value product, the gas may be viewed as a waste by-product when such plans are delayed, fail, or do not exist. Depending on local regulations, the gas may then be disposed of at the well site in practices known as gas venting and production flaring. In the U.S., a growing volume and percentage of the produced associated gas is intentionally wasted in this way since about year 2000, reaching nearly 50-year highs of 500 billion cubic feet and 7.5% in 2018.Produced water
When extracting oil and gas from oil sands and shale oil, water that was present is extracted as well, which is called "produced water". In 2017, an estimated 160 billion gallons of produced water was generated during U.S. shale oil and gas producing operations. Ongoing research seeks to identify safe ways to reuse produced water. The water is usually highly saline, and must be disposed of by injecting it into EPA-permitted Class II water disposal wells.Some produced water contains sufficient lithium, iodine, etc. to be recovered as a by-product.
Crude oil transportation and storage
The product extracted at the wellhead, usually a mixture of oil/condensate, gas, and water, goes through equipment on the lease to separate the three components. The oil and produced water are in most cases stored in separate tanks at the site, and periodically removed by truck. Over the decade 2005–2014, the volume of oil carried to the refinery by tanker ship has decreased. The oil volumes delivered to US refineries by all other modes has increased. Crude oil and petroleum products are transported mainly by pipelines, rail, or water via tanker ships. The U.S. has more than 3 million miles of pipeline dedicated to the transportation of natural gas''.''Pipeline
Most crude oil shipped long distances in the US goes by oil pipeline. In 2014, 58 percent of the petroleum arriving at refineries came by pipeline, up from 48 percent in 2005. In 2014, the United States had 161 thousand miles of interstate oil pipelines, an increase of 29 thousand miles since 2005. The interstate pipelines are connected to 4.2 million miles of trunk oil pipelines. The top US oil pipeline companies in 2014 were, in order of decreasing interstate pipeline mileage: Magellan Pipeline Company, Mid-America Pipeline Company, and Plains All American Pipeline.Water
Petroleum can be transported cheaply for long distances by oceangoing oil tankers. Tankers supplied 31 percent of the oil arriving at US refineries in 2014, down from 48 percent in 2005; the decline reflects decreased oil imports since 2005.For shorter-distance water transport, oil is shipped by barge, which accounted for 5.7 percent of oil arriving at refineries in 2014, up from 2.9 percent in 2005.
Truck
Most oil is initially carried off the site by tanker truck. The truck may take the oil directly to a nearby refinery. In 2014, 2.6 percent of oil arrived at refineries by truck, up from 2.6 percent in 2005. If the refinery is not close, the tanker truck will take the crude oil to a pipeline, barge, or railroad for long-distance transport.Railroad
Before the common availability of long-distance pipelines, most crude oil was shipped by rail. It is for this historical reason that in Texas, oil and gas production came to be regulated by the Texas Railroad Commission. Rail transport of crude oil has made a resurgence since 2005, largely due to the lack of pipeline capacity to transport the increased oil volumes from North Dakota. In 2014, 2.7 percent of crude oil arriving at refineries came by rail, up from 0.1 percent in 2005.Since 2012, oil shipped by rail from the Bakken fields in North Dakota has progressively replaced overseas imported oil used by East Coast US refineries. In February 2015, railroads supplied 52 percent of all crude oil delivered to US refineries on the East Coast.
Rail transportation also resulted in the July 6, 2013 Lac-Mégantic rail disaster while transporting oil from the North Dakota Bakken Formation, killing 47 people in Lac-Mégantic and destroying half the buildings in the city's downtown.