America’s Gas & Oil Production Hike Starts To Slow Down

by | Jan 11, 2024 | Daily News, Environmental News

Home » Environmental News » America’s Gas & Oil Production Hike Starts To Slow Down

In a notable development for the energy sector, once at the forefront of the shale revolution, America’s gas & oil production growth is witnessing a slowdown. Despite forecasts by the Energy Information Administration (EIA) indicating record output levels in 2024 and 2025, there are signs that the pace is tapering off.

This year, the average America’s gas & oil production is expected to reach 13.2 million barrels per day, with a slight increase to 13.4 million barrels per day next year. These figures surpass the previous record of 12.9 million barrels per day set in 2023, which marked an all-time high since the pre-pandemic era. Similarly, dry natural gas production is projected to climb to 105 billion cubic feet per day in 2024 and 106 billion cubic feet per day in 2025.

These production levels are a testament to the lasting impact of the shale boom, which, over the past 15 years, has positioned the US as a leading oil and gas supplier globally. However, the current administration’s approach to the oil and gas industry, which contrasts with its predecessor’s stance, adds a layer of complexity to this narrative. President Joe Biden, who pledged a “transition from the oil industry” during his campaign, has implemented more restrictive measures on oil and gas project leases, particularly offshore and in Alaska.

Despite the increase in production, industry leaders attribute this growth not to the Biden administration’s policies but to other factors. Mike Sommers, CEO of the American Petroleum Institute, emphasized that the production uptick is independent of the administration’s actions.

America's gas & oil production growth

In 2023, oil production surged unexpectedly, defying early EIA forecasts and stabilising global oil prices despite OPEC+ efforts to support the market through supply cuts. Scott Sheffield, CEO of Pioneer Natural Resources, noted that the output increase could lead to a production rate of 15 million barrels per day within five years.

However, the industry is approaching a phase where the growth rate in oil production is expected to decelerate. This is due to the depletion of prime drilling sites and Wall Street’s increasing focus on shareholder returns over new drilling campaigns.

In addition to domestic production, US liquefied natural gas (LNG) exports are also rising. With more export facilities becoming operational, LNG exports are projected to grow from 11.8 billion cubic feet per day in 2023 to 14.4 billion cubic feet per day by 2025. Nonetheless, the industry expresses concerns over delays in export license approvals for new US LNG plants and potential moratoriums on new export permits, raising questions about future energy strategies.

The industry faces both opportunities and challenges as the US navigates these changing dynamics in its oil and gas sector. The decrease in drilling activities, marked by fewer rigs in the field, offset gains at individual wells. Moreover, a decline in gas output linked to oil drilling in the Permian Basin is anticipated. This shift underscores a critical period in the US energy landscape, where strategic decisions and policies will significantly impact the nation’s role in the global energy market.

Also Read: Winter Storm: Widespread Power Outages Hit US Ahead Of Severe Freeze

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