Why is U.S. onshore oil production surging?

AMP
Jul 28
2 min read

By 2024, oil output from U.S. federal onshore lands reached a record 1.7 million barrels per day (b/d)—a sixfold increase since 2008.

Here's how that happened:

1. U.S. total production skyrockets

From 5.0 million b/d in 2008 to 13.2 million b/d in 2024, a staggering 160% growth in national output., according to EIA.

2. Federal onshore growth outpaces national trend

Federal onshore production rose from ≈0.28 million b/d in 2008 to 1.7 million b/d in 2024, a sixfold increase, faster than overall U.S. growth.

3. Offshore lags behind

Federal offshore oil output reached around 1.8 million b/d in 2025, slightly above onshore—a smaller growth rate, underlining the shift to onshore.

4. Permian Basin dominance

Most federal onshore gains stem from New Mexico’s Permian Basin, where enhanced drilling permits and leases boosted output drastically by 2024.

5. Expanding permits and wells

Between FY 2020–2023, New Mexico accounted for the majority of new drilling permits and starts on federal lands, opening the door for rapid production builds.

6. Technological gains increase efficiency

Advanced fracking, horizontal drilling, and automation improvements helped U.S. rigs produce more oil per well. In 2024, productivity in the Permian increased by roughly 9% per rig.

7. Infrastructure keeps pace

New pipelines—such as the Matterhorn Express—straightened out natural gas takeaway constraints, enabling oil operators to scale production without logistic hurdles.

8. Investor preference for onshore plays

Onshore shale basins offer lower costs and faster returns—dominating capital flows. By 2025, shale output was estimated at around 9.7 million b/d nationwide.

9. Supportive regulatory environment

States like New Mexico simplified federal land permitting. Combined with accelerated Federal BLM approvals, operators ramped up activity. Workforce cuts to BLM may slow this, but production momentum remains.

10. Lower lifting costs onshore

Producing shale oil typically costs less than offshore deepwater wells. In volatile price environments, onshore fields remain financially attractive and resilient.