OIL PRODUCTION IN THE LOWER 48 STATES - RECONCILING CURVE FITTING AND ECONOMETRIC-MODELS

This paper assesses the effect of geological, economic, and political factors on oil production in the lower 48 states between 1947 and 1985 with a new method that combines curve fitting and econometric models. The results account for most of the variation in annual rates of oil production and are consistent with new lower estimates of recoverable oil supply. The collapse in oil prices now reinforces downward pressure on production that is exerted by the physical depletion of inexpensive sources of oil. The subsequent decline in production may push the US to greater levels of import dependence than prevailed prior to previous price increases.