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Despite the Biden administration’s aggressive green energy push, the US still leads the world in oil production, with the Energy Information Administration (EIA) naming the US the world’s top producer for the sixth consecutive year in 2023. ing.
But energy market analyst and FOX Business contributor Phil Flynn says a number of factors are currently threatening America’s title.
A general view of an oil rig on federal land near Fellowes, California, on April 15, 2023. (Reuters/Nicola Groom/File Photo/Reuters Photo)
Flynn told Fox News Digital that while the Biden administration is trying to take credit for record oil production, the investments and technology that have enabled the U.S. energy industry to ramp up production are something the administration has fought against every step of the way. He said it was carried out despite the fact that the
“But because of what we’ve seen so far, there are warning signs that it’s going to be difficult to continue that production when it comes to the regulatory side,” Flynn said in an interview.
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He pointed to last week’s decline in rig operations, which could be a trend, in part due to the dramatic decline in natural gas prices, but also due to uncertainty around the regulatory environment. “In some ways, we seem to be turning the corner,” he said. The industry was at full strength at a time when they really had control. ”
The sun is visible behind a crude oil pumpjack in the Permian Basin in Loving County, Texas, on November 22, 2019. (Reuters/Angus Mordaunt/File Photo/Reuters Photo)
According to the EIA, U.S. crude oil production, including condensate, will average 12.9 million barrels per day (b/d) in 2023, exceeding the U.S. and world record of 12.3 million barrels per day (b/d) set in 2019. This is a level that exceeds that of the previous year. .Monthly average US crude oil production In December 2023, production reached a record high of over 13.3 million barrels per day.
Flynn said that while the EIA touts record U.S. production in its latest report, it also notes that U.S. production growth is slowing, which means “we can’t continue on the path we’re on.” It shows that the best days are yet to come.” ”
The analyst said the Biden administration is pushing for new methane regulations along with a methane tax, which could put many small producers out of business.
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Flynn said these regulations send a signal to producers that they need to be careful because new taxes and duties will be incurred. new regulations It will slow them down. “So production will start to decline, although it may increase a little bit.”
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He explained that once wells begin to run dry, producers must continue to invest money to continue production. But an uncertain regulatory environment will make it more difficult for people to invest in U.S. oil and gas.
Flynn said he expects oil prices to remain near $80 a barrel in the near term, although rig drawdowns and U.S. investment cuts will be felt over the summer. He added that the U.S. “dodged a bullet” and didn’t see any major price spikes this winter due to warm weather and an oversupply of natural gas.
However, he expects the regulatory environment to have a significant impact on supply in the future.
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“We’re excited about record production because of the investments that have been made in the past, but equally, the decisions we’ve made today could start to plateau production,” he said. “In other words, we are living on borrowed time. If we don’t change course, this miracle we’ve seen in U.S. oil production could be reversed. be.”
FOX Business’ Eric Revell contributed to this report.
