U.S. CHAMBER OF COMMERCE

It's getting better all the time

By Stephen Eule

That’s the conclusion of the U.S. Energy Information Administration’s (EIA) July 2018 report on drilling productivity.

The report looks at the change in the total number of drilling rigs in operation along with estimates of drilling productivity and estimated changes in output from existing oil and natural gas wells to provide estimated changes in production for seven key regions—Anadarko, Appalachia, Bakken, Eagle Ford, Haynesville, Niobrara, and Permian.

What we’re really interested in here is the estimated year-over-year change in oil and natural gas production per drilling rig for new wells. The chart nearby tells the story: For all of the seven regions EIA examined, new-well oil and natural gas output per rig is higher in 2018 than during the same period in 2017. That means in all of these regions, we’re producing more with each well drilled. That’s good news for the U.S. economy and energy security.

The Global Energy Institute has been pointing out for years that almost constant improvements to technologies are keeping U.S. producers ahead of the game by reducing the costs and time it takes to drill a well and increasing the volume of hydrocarbons flowing from each new well.

These improvements are largely responsible for EIA most recent crude oil and natural gas production forecast. EIA expects U.S. crude oil production, mostly tight oil, will fluctuate between 11 and 12 million barrels per day out to 2050—sustained at a rate 2 million barrels per day higher than the previous U.S. record of 9.6 million barrels per day set in 1970. EIA also expects natural gas production to jump an astonishing 58% out to 2050, from 27 to 43 trillion cubic feet, which should keep the U.S. as the world’s largest producer.

Thanks to our innovative, high-tech energy industry, it’s pretty clear that got to admit that American energy is getting better all the time.

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