A study was initiated in 1990 to evaluate the potential of increasing U.S. heavy oil production to lessen the U.S. domestic oil production decline. In California, heavy oil production was increased in the 1960s as light oil production declined to meet the petroleum demand, suggesting that similar trends are possible elsewhere. Changes in refining were made in accordance with the production trends. This study researches the U.S. petroleum industry to determine if it could undergo similar modifications. The U.S. heavy oil resource, production characteristics, and existing refining capacity were evaluated. The resource was comprised of a total 1,025 heavy oil reservoirs; 535 were characterized in more detail. Reliable information was not available for the other 490 reservoirs which include Alaskan heavy oil reservoirs. Heavy oil remaining in the 535 heavy oil reservoirs characterized was estimated to be 68.3 billion bbl. As much as 18% of the 68 billion bbl, or 12 billion bbl may be recoverable using current technology. At the current oil price (projected flat price of $18/bbl for WTI), heavy oil production rates are expected to decline through the year 2010. An incentive of $2.90/bbl U.S. heavy oil would be needed to increase production over current levels by 300,00O/day in the year 2010. U.S. refining capacity will need to be expanded to process the increased heavy oil production.