The 10 Most Oil-Rich States

24/7 Wall St.

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.

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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.

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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.

10. Louisiana
> Proved oil reserves: 463 million barrels
> Natural gas reserves: 22.1 trillion cubic feet (4th most)
> Energy consumption per capita: 427.1 million BTUs (8th highest)
> Number of operating refineries: 19 (2nd most)

Louisiana’s proven oil reserves totaled 463 million barrels in 2012, up 11% from the year before and 10th most nationwide. The state’s 19 oil refineries are capable of processing roughly 3.3 million barrels of oil per day, second only to Texas. While living in an oil-rich state does not guarantee lower-than-average gas prices, a gallon of gas in Louisiana cost $3.43 as of mid-July, according to AAA, among the lowest and compared to a U.S. average of $3.60 per gallon. Total annual crude oil production has fallen dramatically in the past decade, from more than 90 million barrels in 2003 to nearly 72 million barrels last year. Still, this was more than all but six other states.

9. Utah
> Proved oil reserves: 613 million barrels
> Natural gas reserves: 7.8 trillion cubic feet (10th most)
> Energy consumption per capita: 471.3 million BTUs (5th highest)
> Number of operating refineries: 5 (6th most)

Utah had 613 million barrels of proven reserves as of 2012, up nearly 22% from the year before. Additionally, the state produced 35 million barrels of oil in 2013, among the higher production volumes in the country. In addition to its proven reserves, production in Utah could increase in the coming years as oil companies explore ways to tap into oil resources contained in the Green River Formation, which is estimated to hold more oil shale than Saudi Arabia. Most of this oil, however, is likely unrecoverable due to technological and cost constraints, and is therefore not included in reserves.

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8. Colorado
> Proved oil reserves: 618 million barrels
> Natural gas reserves: 21.7 trillion cubic feet (5th most)
> Energy consumption per capita: 279.9 million BTUs (19th lowest)
> Number of operating refineries: 2 (tied, 17th most)

Colorado’s proven oil reserves increased by 46% between 2011 and 2012. In addition to increasing reserves, production also rose by more than 30% between 2012 and 2013, driven by increasing activity in the Niobrara Formation, which spans the eastern third of the state. Discoveries in Colorado included five million barrels from new oil fields, as well as 184 million barrels from existing sources of oil in 2012. Colorado is not just oil rich. The state also contains the fifth-most natural gas proved reserves in the country. Tapping into its reserves, natural gas production has doubled in the past decade through 2013, according to the EIA. Additionally, Colorado's recoverable coal reserves were estimated in 2012 at nearly 10 billion short tons, the eighth highest figure in the country.

7. Wyoming
> Proved oil reserves: 706 million barrels
> Natural gas reserves: N/A
> Energy consumption per capita: 302.9 million BTUs (23rd highest)
> Number of operating refineries: 6 (4th most)

Wyoming increased its crude oil production by more than 9% to roughly 63 million barrels in 2013, potentially driven by an increase in proved oil reserves. Wyoming’s booming energy sector helped drive growth in other parts of the economy as well, such as the trucking industry, which hauls rigs, drills, water, sand and crude oil around the state. The full impact of the energy boom is probably nowhere better shown than in the state’s growth rate. In 2013, Wyoming’s GDP rose by 7.6%, of which 6.1 percentage points were attributed solely to mining -- which includes the production of natural resources. Oil is not the only booming energy sector in Wyoming. The state accounts for 15% of the nation’s total coal reserves as of 2012, and roughly 40% of total coal production.

6. Oklahoma
> Proved oil reserves: 934 million barrels
> Natural gas reserves: 28.7 trillion cubic feet (3rd most)
> Energy consumption per capita: 319.1 million BTUs (22nd highest)
> Number of operating refineries: 5 (6th most)

Both Oklahoma’s oil and natural gas reserves grew in recent years. Nearly 500 million barrels of reserves were found at existing site in 2011 and 2012, expanding total proven reserves to 934 million barrels. In addition to added reserves, crude oil production increased by 25% between 2012 and 2013, one of the largest increases in the nation. Oklahoma is rich also in natural gas, with 28.7 billion cubic feet in proven reserves as of 2012 -- third most in the nation. Together with Pennsylvania and Texas, the three states accounted for nearly half of the nation’s total natural gas reserves as of 2012.

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5. New Mexico
> Proved oil reserves: 965 million barrels
> Natural gas reserves: 14.6 trillion cubic feet (7th most)
> Energy consumption per capita: 256.2 million BTUs (15th lowest)
> Number of operating refineries: 2 (tied, 17th most)

New Mexico has benefited from new extraction technologies. Despite wells running dry in the early 2000s in the Permian Basin, which occupies 300 miles in New Mexico and Texas, fracking and other extraction methods allowed access to previously inaccessible oil reserves in 2010. Quickly, crude oil production in New Mexico grew to historical levels, increasing by more than 50% from 2010 to 2012. A new oil field and 170 extensions in 2012 also buoyed oil production. New Mexico also has the seventh largest natural gas proven reserves and the 10th largest coal reserves in the country.

4. California
> Proved oil reserves: 3.0 billion barrels
> Natural gas reserves: 2.1 trillion cubic feet (8th least)
> Energy consumption per capita: 201.1 million BTUs (3rd lowest)
> Number of operating refineries: 17 (3rd most)

California’s 2.9 billion barrels of proven oil reserves made it the fourth most oil-rich state in the nation in 2012. In terms of production, California ranked third, with nearly 200 million barrels produced in 2013. Additionally, California is also a top oil-refining state, in part because of the stringent regulations California has in place on the amount of oxygen allowed in gasoline -- which makes imports from other states prohibitive. Additionally, California’s ongoing water shortage may make it difficult for oil producers to expand their activities in the state. Despite its high oil production, California's per capita energy consumption ranked third lowest in the country in 2012.

3. Alaska
> Proved oil reserves: 3.3 billion barrels
> Natural gas reserves: 9.7 trillion cubic feet (9th most)
> Energy consumption per capita: 872.7 million BTUs (the highest)
> Number of operating refineries: 6 (4th most)

Oil production in Alaska has slowed over the past two decades. Additionally, proven reserves in the state declined by 13% between 2011 and 2012. Oil production may also have been hindered by newly available oil reserves in the continental United States, which are easier for oil companies to transport to market. Given that the vast majority of funding for Alaska’s state budget comes from oil production, the state could potentially face fiscal trouble in the coming years. In May 2013, Alaska's Governor Sean Parnell lowered the oil production tax in an attempt to reignite oil drilling interests in the state.

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2. North Dakota
> Proved oil reserves: 3.8 billion barrels
> Natural gas reserves: 4.0 trillion cubic feet (11th most)
> Energy consumption per capita: 254.7 million BTUs (14th lowest)
> Number of operating refineries: 1 (tied, 24th most)

North Dakota has become the poster child of the energy boom in the United States as technological advances made extracting oil from the Bakken Shale profitable. Over the two years ending in 2012, the state added nearly 25 million barrels of proven reserves from new oil fields, and more than 1.6 billion barrels of reserves from current drilling operations. As a result, proven reserves in the state more than doubled. Additionally, between 2003 and 2013, oil production in North Dakota exploded by nearly 1,000%. As a result of the oil boom, jobs in the mining and logging industries -- which include oil production -- grew at annual rates of nearly 60% in 2011 and nearly 47% in 2012, according to the BLS. When combined with the transportation industry, which supports the mining and logging industry, it was little surprise that North Dakota has consistently boasted the lowest unemployment rate in the country since 2009.

1. Texas
> Proved oil reserves: 9.6 billion barrels
> Natural gas reserves: 93.5 trillion cubic feet (the most)
> Energy consumption per capita: 324.9 million BTUs (21st highest)
> Number of operating refineries: 27 (the most)

Texas accounted for nearly a third of both crude oil and natural gas reserves in the United States in 2012. The state has more than 9.6 billion barrels of proven reserves, a capacity that expanded rapidly in 2011 and 2012 when the state discovered 55 million barrels of reserves from new oil fields and more than 3.6 billion barrels from existing drilling sites. With more than 932 million barrels of oil produced in 2013, and 27 refineries capable of processing nearly 5.2 million barrels per day, Texas leads the nation in virtually all facets of the oil industry. Between the state’s Eagle Ford Shale and Permian Basin, Texas is poised to produce nearly 3.4 million barrels of oil each day in 2014. If Texas were its own country, it would be the sixth largest oil producer in the world.

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