Skyrocketing oil prices have led to in- creased Utah production recently, but the state and nation are failing to keep up with their own demand and increasing dependency on foreign oil, according to a new report.

Utah crude oil production rose to 14.8 million barrels in 2004, an in- crease from 13.1 million barrels in 2003, according to the University of Utah's Bureau of Economic and Business Research.

Despite the increase, Utah oil production is far less than 1985, the year production peaked at 41.1 million barrels.

"Crude oil produced in Utah is insufficient to supply the five refineries that operate in Utah," the report said, "resulting in Utah being a net importer of crude from other states and Canada."

Utah's five refineries have a capacity of 61 million barrels annually, accounting for 28 percent of the refining capacity in the Rocky Mountains.

Lee Peacock, president of the Utah Petroleum Association, said Utah will never again reach the golden years of past crude oil production.

"Obviously there is hope and optimism with the new finds in Sigurd," Peacock said. "That could open up a whole new oil province, and there is significant development in the Uinta Basin."

In 2004, Wolverine Gas & Oil Corp. hit oil in Sigurd, Sevier County, in what some believe could rank as the biggest onshore discovery in 30 years. Wolverine believes the deposit could contain 100 million to 200 million barrels of oil in sandstone pores.

Despite that find, Peacock said that about 95 percent of all the drilling occurring in Utah right now is for natural gas, not crude oil.

Jim Springer, a spokesman for the Utah Division of Oil, Gas and Mining, said Utah's declining oil production is mainly due to geologic reasons, with the state's aging wells offering up fewer reserves.

The report noted that Utah ranked 15th among 31 states and two offshore areas in crude oil production. In 2004, Utah accounted for 0.7 percent of the nation's crude oil production. All 31 states have shown declines in production.

Over the past 20 years, the report said, only offshore operations in the Gulf of Mexico have shown a rise in crude oil production. U.S. oil production peaked in 1970 at 3.18 billion barrels. In 2004, production was at its lowest point at 1.98 billion barrels.

"While gasoline is supplied by the five refineries in Utah," the report said, "gasoline is also imported to the state."

The Pioneer Pipeline transports refined petroleum products to the Wasatch Front from Wyoming, and tanker trucks from New Mexico and Nevada supply gasoline to southern Utah.

Competition from China and emerging economies of the Pacific Rim, the report said, will likely keep price increases experienced over the past year "sustainable into the future."

"The crude oil industry in the United States is fairly mature," Peacock said. "We need to do everything we can in this country to increase our domestic supplies. We probably will never get to the point of being self-sufficient, but we can improve our situation by increasing domestic supplies."

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