Oil and Natural Gas Production Just Keep Increasing Thanks to Technology and Innovation!

There is nothing like the American oil and natural gas industry for the successful practical employment of technology and innovation, and this is precisely what moves our nation forward. The following excerpts from an Energy Information Administration story, explains what I mean:

In our latest Short-Term Energy Outlook (STEO), we forecast that crude oil production in the United States will grow to an average of 13.7 million barrels per day (b/d) and marketed natural gas production will grow to an average of 114.3 billion cubic feet per day (Bcf/d) in 2025. Most of the forecast growth in oil and natural gas production comes from the Permian region of western Texas and eastern New Mexico, where we expect productivity gains, new and expanded infrastructure, and high crude oil prices will support rising production…

Well productivity is contributing to Permian production gains

U.S. crude oil and natural gas production has been increasing despite a decline in the number of active rigs since late 2022. Since early 2023, the Permian region has had more active rigs than the rest of the Lower 48 states and has continued to complete hundreds of wells (or prepare them for production) each month.

In the Permian, increased rates of production from new completions are offsetting existing wells’ production declines and leading to higher crude oil and natural gas output. These productivity increases indicate significant efficiency gains and technological advancements in the drilling and completion process.

As of July 2024, newly completed wells in the Permian were producing an average of 433,000 b/d in their first full month. Natural gas production from new Permian wells in July 2024 averaged 780 million cubic feet per day. This new well production is more than offsetting the declines in production from existing wells.

Growing well productivity suggests that operators in the Permian are successfully implementing more advanced drilling and completion techniques, including longer lateral lengths, optimized well spacing, and enhanced fracturing designs.

We forecast that crude oil production in the Permian region will increase by 430,000 b/d from 2023 to 6.3 million b/d in 2024 and 6.6 million b/d in 2025, partly due to drilling productivity improvements.

Similarly, we forecast that marketed natural gas production in the Permian region will rise by 1.9 Bcf/d in 2024 and by 1.0 Bcf/d in 2025 to average 25.8 Bcf/d in 2025. Most of the natural gas production in the Permian is associated natural gas and comes from oil-directed wells. We expect crude oil prices will remain sufficiently high to support growth in crude oil production and associated natural gas production in the region.

New pipeline capacity is delivering Permian production to demand centers

In previous years, rapid growth in crude oil and natural gas production in the Permian region was temporarily constrained by the ability to move that production out of the region. Based on several projects currently under development, we expect that new pipeline capacity will deliver crude oil and natural gas from the Permian region to demand centers and alleviate transportation constraints. Enbridge announced that it is increasing Permian takeaway capacity by expanding its Gray Oak pipeline by 120,000 b/d before the end of 2025.

Similarly, new natural gas pipelines are soon coming online: the 580-mile Matterhorn Express Pipeline, which is expected to enter service in the third quarter of 2024, will be able to transport up to 2.5 Bcf/d of natural gas from the Waha Hub in West Texas to Katy, Texas. The pipeline will receive natural gas from upstream Permian Basin connections and from direct connections at processing facilities in the Midland Basin before connecting to the Agua Blanca Pipeline.

This success story means everything to the future of our nation:

• It enhances our energy-dominant status across the world.

• It keeps gas prices within reason, off-setting inflation and taxes.

• It ensures our freedom to travel.

• It attracts the capital-intensive industry we need for high-paying jobs.

• It provides an alternative to Russian gas for Europe.

• It’s making Texas the land of opportunity.

• It gives us unparalleled energy security compared to other nations.

• It offers superb careers for skilled blue collared workers.

• It lowers the cost of doing business in America.

• It provides the foundation for the supply chains on which we depend.

• It gives us the raw material to produce thousands of products.

• It heats homes affordably and makes home ownership possible.

The oil and natural gas industry and the people who work in it are the very heart of America and they deliver the technology and innovation to make it all possible.

#Oil #NaturalGas #Texas #Permian #Pipelines