As 2023 draws to a close, the U. S. is generating more oil and herbal fuel than ever before, even in the face of efforts by government planners to force a shift to other, greener energy sources. In shale well recoveries, the U. S. is now generating more oil per day than any other country that has ever produced. The fact that all of this has been completed despite the number of domestic platforms falling by more than 20% over the course of the year, according to Enverus, makes it one of the most notable effects in the industry’s long history.
This result is all the more remarkable given that it comes in the midst of a presidential administration whose leaders have continually pressed their preference to end the industry within a decade and are a reminder of the industry’s normal resilience. In March 2021, I noted, “The history of the U. S. oil and fuel industry is a major factor in the history of the U. S. oil and fuel industry. “UU. es that every time the ‘experts’ queue up to declare her dead, they figure out a way to make her disappear. 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 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 the industry setting new production records and its corporate sector performing as well as any sector in the financial markets. Remarkable.
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 the politicians and their appointees do produce one thing with an efficiency of their own: Regulations. Those regulations and the processes the agencies implement to enforce them can lead to all manner of cost increases and delays in getting projects done. EPA is currently in the midst of rolling out heavy new methane regulations specifically targeting the natural gas business. The Department of Interior just recently held its first significant lease sale in the Gulf of Mexico under Biden after years of delay, and really had to be forced by the federal courts to do so.
But a presidential administration’s ability to hamper the oil and fuel sector is limited unless it takes positions on U. S. government-owned lands and coastal waters. As Ingham points out, the expansion of U. S. oil and fuel production since 2021 has been mostly concentrated in the Permian Basin, straddling Texas, where there is virtually no federal land, and New Mexico, where federal lands are combined into a kind of chessboard. mode with personal and state-owned lands, where no federal authorization procedure applies.
“The U.S. is setting production records, and producing more crude oil than any other country ever has, because of the fantastic growth in Texas Railroad Commission District 8 – the core of the Permian production area – and Lea and Eddy Counties in New Mexico,” Ingham points out. Lea and Eddy counties in New Mexico also happen to be home to the sweet spot of the Delaware Basin, which makes up the western third of the greater Permian Basin region. So, the new production records currently being set are as much a factor of simple geography as any other single reason.
Drone view captures a drilling site in the Permian Basin at sunset.
The EPA’s methane regulations and other measures apply to all types of land, increasing prices and administrative processes across the industry. Historically, however, corporations have demonstrated an impressive degree of adaptability to ensure compliance with similar new regulations.
As we enter 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 anti-oil and fuel rhetoric. However, no one thinks that this is due to a lack of effort on the part of the administration. But no president, no matter how competitive, can dictate degrees of domestic oil and fuel production; The authority to do so, short of a declaration of a national emergency, simply does not exist.
For U. S. consumers and drivers, this is a satisfying reality, given that gasoline and diesel prices are near three-year lows at the end of 2023. The approximately 1 million additional barrels of oil per day that the domestic industry added to the global demand market in 2023 played a role in achieving this goal.
Stewart is blunt when asked to assess efforts by administration officials to take credit for the lower gas prices. “The American people should know the truth, which is this: the Biden Administration had absolutely nothing to do with record production,” Stewart says. “It happened in spite of them.”
Never dismiss this industry. Not only will it be Biden’s presidency, but she’ll likely find tactics to thrive long after she’s gone, largely because she and the products she supplies are too tied to maintaining the elegant life to consider any other outcome.
This is, in a word, remarkable.