As 2023 comes to a close, the United States is producing more oil and more natural gas than ever before, even in the face of efforts by government planners to force a move to other, greener, sources of energy. In fact, thanks to a major uptick in per-well recoveries in shale wells, the US is now producing more oil per day than any single nation has ever achieved. The fact that this has all been accomplished despite a domestic rig count that dropped by well over 20% during the year, according to Enverus, makes this one of the most remarkable outcomes in the industry’s long history.
This result is all the more notable given that it comes amid a presidential administration whose leaders have continually pressed their preference for ending the industry within a decade and are a reminder of the industry’s normal resilience. In March 2021, I noted: “The story of the US oil and fuel industry is that every time the ‘experts’ line up to declare it dead, they figure out a way to make it go away. It comes roaring back.
The truth is, those effects of 2023 are a continuation of the burgeoning boom I talked about in this 2021 article. At the time, I predicted that this post-COVID boom would not be a bonanza like the one the country witnessed early in the Eagle Ford Shale and the Permian Basin boom. Rather, it would be a more robust era of increased output and accelerated effects through the adoption of new technologies, procedural efficiency, economies of scale, and strong monetary discipline.
And here we are, 33 months later, with an industry that is setting new production records and whose business sector is acting like any other sector of the money markets. Notable.
Karr Ingham, vice president and petroleum economist at the Texas Energy Producers Alliance, agrees: “The United States is now generating more crude oil than any other country, because Texas oil and fuel companies, and Texas independents in particular, are expanding production in the Permian Basin for the benefit of the American people and the American economy. And we do it with ruthlessly high levels of power and productivity.
“Smart knows never to bet against this industry,” Tim Stewart, president of U. S. S. A. Oil.
But politicians and their representatives produce something with its own power: regulations. These regulations and the processes agencies put in place to enforce them can lead to all sorts of fee increases and delays in delivering assignments. Lately, the EPA is implementing onerous new methane regulations, particularly targeting the herbal fuels sector. The Interior Department recently held its first primary lease sale in the Gulf of Mexico under the Biden administration after years of delays, and had to be forced to do so through federal courts.
But a presidential administration’s ability to hamper the oil and fuel sector is limited, unless it takes a stand on U. S. government-owned land and offshore waters. U. S. As Ingham points out, the expansion of U. S. oil and fuel production is a major factor in the production of oil and fuels. The U. S. military since 2021 has been primarily concentrated in the Permian Basin, straddling Texas, where there is virtually no federal land, and New Mexico, where federal lands are combined on a kind of chessboard with personal and Crown-owned lands, where no federal authorization procedure applies.
“The U. S. is setting production records and generating more crude oil than any other country has ever done, due to the expansion of Texas Railroad Commission District 8 – the center of the Permian production domain – and Lea and Eddy counties in New Mexico. Ingham emphasizes Lea and Eddy counties in New Mexico are also home to the Delaware Basin sweet spot, which makes up the western third of the Permian Basin region. Therefore, the new production records that are being set lately are as much a matter of geography as any other reason.
Drone view captures a drilling site in the Permian Basin at sunset.
The regulations on methane and other EPA measures apply across all land types, so those serve to increase costs and administrative processes throughout the entire industry. Historically, though, companies have demonstrated an impressive degree of adaptability in ensuring compliance with similar new regulations.
As we approach the final year of President Biden’s initial term, it is clear that his record, similar to that of the domestic oil and fuel industry, is not keeping up with his competitive rhetoric against oil and fuels. However, no one believes that this is due to a lack of effort on the part of the administration. But no president, no matter how competitive, can dictate the levels of domestic oil and fuel production; The authority to do so, outside of a national emergency declaration, simply does not exist.
For American consumers and drivers, this is a happy reality, given that gasoline and diesel prices are near 3-year lows as 2023 comes to an end. The additional 1 million or so barrels of oil per day the domestic industry has added to the global market during 2023 played a significant role in making that happen.
Stewart is blunt when asked to evaluate administrative officials’ efforts to obtain credits for declining fuel prices. “The rest of the Americans know the truth, which is this: Biden’s administration surely had nothing to do with record production,” Stewart says. “It happened in spite of them. “
Never downsize this industry. Not only will it be Biden’s presidency, but he will likely find tactics to thrive long after his demise, largely because he and the products he supplies are too tied to the maintenance of modern life to consider others. result.
This is, in a word, remarkable.