Here’s where US oil and gas production rises and falls: Spotlight Energy Matters
The United States produces more oil and gas than any other country. Domestic production is increasing in some areas and decreasing in others, but new restrictions on parts of the drilling process could significantly reduce production in the coming years.
From his first week in office, President Joe Biden pledged to transition from oil and gas exploration to clean energy. He announced a lease pause on federal land and offshore waters. The Home Office has been asked to review site and permitting procedures.
“We will check it [and] Reset the oil and gas leasing program,” President Biden said during the executive order signing. “We will start managing land and waterways in a way that we can protect them [and] keep them.”
The Interior Ministry completed its review in April last year and announced reformed tenancy procedures. Royalties, or the percentage of oil and gas sales that companies pay to the government, would rise by 50% – from 12.5% to 18.75%. The land nominated for drilling by the oil and gas industry has been reduced by 80%.
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“We’re all paying 50% more for 80% less,” US Oil and Gas Association President Tim Stewart told Fox News’ Neil Cavuto after the leasing reform announcement. “I think that’s them trying to thread the needle, split the hair and say, okay, we’re going to go ahead with a leasing program. We’re not going to release much out there.”
Oil and gas production has increased over the past decade, including on federal land, which accounts for about 25% of total production. Most occur on government or private property. The government leases companies that want to extract oil or gas from federally owned land. Once a company has the lease, it must also apply for a drilling permit. Permits are generally valid for two years or until the lease expires.
The Bureau of Land Management may also grant a two-year extension to give the operator more time to drill. The Biden administration approved nearly 5,000 permits in 2021, the highest number in more than a decade. These will be added to unexpired approvals that have already been approved. However, only 1,626 new wells were started in 2022.
The White House said oil and gas companies are blocking further production by not using all available permits.
“There are 9,000 unused approved drilling permits,” former White House press secretary Jen Psaki told reporters last March. “So I would suggest that if there is a desire to drill more, you ask the oil companies why they are not using these.”
Oil and gas majors argue that the drilling permits are for land already earmarked for production. They believe more acreage is needed to actually increase production.
“The management’s demand for a 9,000 lease is nonsense,” said Frank Macchiarola, senior vice president of the American Petroleum Institute. “In fact, we have nearly 100,000 producing wells in the United States with current leases. Two thirds of these leases are actually in production. That’s a 25-year high. What they’re really saying is that we don’t want to produce in the United States anymore. We don’t want to make more space available for production.”
Democrats believe that when land is set aside for new energy generation, some of it should include clean energy.
“What we do know is that America is a world leader in energy. We are blessed with abundant energy resources. This must include the abundant resources of the sun and wind. It’s cheaper energy,” Kathy Castor, D-Fla. said. “We want to build these vehicles. We want to have the solar modules manufactured here in America. We want to build the wind turbines here. And if we don’t invest in that cleaner, cheaper energy now, we’re going to rely more on China and the rest of the world down the road.”
In 2021, only 407 new leases were issued by the Bureau of Land Management during the lease break. It was the lowest number in the past two decades. Land area also fell below 25 million acres for the first time in 20 years. Western countries in particular have had less production in all parts of the oil drilling process.
“I’m from Wyoming, one of the most energetic parts of this country. We can produce it. We have it. He’s forcing us to keep it in the ground,” said Senator John Barrasso, R-Wyo. “At the same time, he will urge Iran, Saudi Arabia and Venezuela, places run by dictators, to produce more. They don’t produce energy in the same responsible way that we do in Wyoming and in the United States.”
Wyoming oil production on federal lands has yet to return to pre-pandemic numbers. State production was about 8,000 barrels per day below 2019 production. Utah oil production is also down about 5,000 barrels per day from 2019 numbers. Colorado, meanwhile, has slightly increased state production, at about 200 barrels per day more than 2019 The construction of new wells slowed and the number of oil producers fell in all three states. Wyoming saw the sharpest decline, with more than 4,000 wells offline in the past five years.
New Mexico has significantly increased its oil and gas production. In 2022, the state was producing more than 977,000 barrels per day on federal land alone. That’s nearly three times what it was in 2018. In 2021, New Mexico received more land leases and more drilling permits than any other state. It also had the highest number of new wells under construction. The new production in New Mexico is likely because it holds part of the Permian Basin. Part of the energy-rich area is also in Texas, where most oil production is on private land — not federal property. The region is producing at record levels, but experts say this type of production wasn’t always thought possible.
“People were saying that production in the Permian Basin would level off below a million barrels a day,” Macchiarola said. “Due to the innovations in the industry, we are seeing production of up to 6 million barrels per day in just a short period of time. The Permian Basin is part of a larger story of the shale revolution here in the United States through ingenuity and technological advances in industry.”
Natural gas production has also ramped up in some parts of the US. The Appalachian region is home to the Marcellus Shale. It is the second largest natural gas discovery in the world. However, regulations and policies in regions like New England block the approval of pipeline projects that would transport gas.
“The prices that people in New England pay for energy are much higher than the rest of the country because unfortunately we can’t get that resource right next to the Marcellus,” Macchiarola said.
Kevin Book, managing director of Clearview Energy Partners, said a lack of approvals for reforms creates problems for investments.
“These are private companies. They’re actually generating returns for shareholders,” Book said. “Shareholders want their capital back when there is no good productive use for it. So what’s happening is that they don’t have access to projects that give them acceptable returns because they don’t have things like permits that they can’t get, or the infrastructure — the pipes that they need — the ports that they need to expand it and send the oil out to the world.”
Sen. Joe Manchin, DW.Va., has attempted to negotiate with fellow Democrats to increase approvals. He believes his bill could soon be put to a House vote.
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“We all recognize that it has to be done. If not, we cannot build what needs to be built and provide the energy the country needs,” Manchin said in the Feb. 7 special report.
Some Democrats recognize that the transition to renewable energy will be a long process.
“The climate crisis also leads to higher costs in general,” Castor said. “We need to reduce climate pollution over time. But you can’t flip a switch. This has to be a managed transition.”
President Biden has also acknowledged that oil and gas will be needed for a while. He said in his State of the Union address it would take the US at least a decade. In mid-February he went even further: “We will need oil and gas for a long time. It will not go away.”
Renewable energy production has also increased in recent years and now accounts for more than 12% of US energy consumption. Oil and natural gas remain the two leading sources. Many legislators and economists agree that all forms of energy are necessary for the future.
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“The United States is a tremendous producer of oil and gas,” Book said. “Even if the United States does move to cleaner fuels, and as a wealthy country we almost certainly will, there will be a world willing to consume what we produce. That’s money we can make here at home on fuels that are cleaner than what a lot of these countries are using right now. So a chance to clean them up while we make money, even if we switch at home. So it’s not necessarily an either/or. It can be both.
https://www.foxnews.com/politics/here-where-oil-gas-production-increasing-and-decreasing-across-us-spotlight-energy-matters Here’s where US oil and gas production rises and falls: Spotlight Energy Matters