HOUSTON - Drilling for natural gas has taken a back seat to oil drilling in the United States for the first time in 18 years, according IHS-CERA.

The Houston Chronicle reports that by 2020, the surge in oil drilling could increase U.S. oil production by as much as 3 million barrels per day, according to Peter Stark, head of IHS-CERA's industry relations.

On June 24, the number of rigs drilling for oil surpassed the 1,000 mark for the first time since 1987. IHS-CERA predicts that oil production could directly and indirectly generate another 1.3 million U.S. jobs over the next decade and raise an additional $97 billion in federal taxes and royalty payments, writes the newspaper.

The "oil boom" is taking place in U.S. oil fields including the Permian Basin in Texas, and in newer fields like North Dakota's Bakken shale and Ohio??s Utica shale. However, the newspaper adds that oil drilling could slow if natural gas prices continue to rise and "make gas projects more attractive ?" which many analysts expect in the next year."

Companies cite that drilling for oil can be cheaper than drilling for natural gas. Tom Ward, CEO of SandRidge Energy, told the newspaper that his company is spending about $760,000 per well in the Central Basin field in the Permian, compared to several million per well in most shale gas fields. Likewise, John Christmann, head of Apache Corp.'s Permian Basin operations, commented that his company has acquired acreage in the Empire ABO field in the Permian, where no new wells have been drilled since 1984.

"In some cases you have million-barrel wells that have never had an offset drilled near them," Christmann told the newspaper.