U.S. Current Oil Growth
As we hear about global crises and domestic issues, I appreciate that we live in a country of freedoms and am thankful for the CBSA member companies that work hard to provide products and services to many industries here and abroad. One particular industry in our sights is the oil and gas industry. Lately we have experienced relief at the gas pump. With a drop in crude oil prices, there has been a trickledown effect on American companies, jobs and the economy. Many factors have resulted from this price decrease including rapidly growing oil supplies, OPEC (Organization of the Petroleum Exporting Countries) member attitudes, global demand, the strength of the U.S. dollar and disruptive strife in places such as Ukraine and Libya.
The biggest factor has been the rapid growth of U.S. oil production, which has supplied more oil to the global market than the relatively stagnant demand can absorb. Much of the U.S. oil production growth is due to the development of fracturing by George Mitchell of Mitchell Energy. Mitchell (a native Texan) saw the potential for improving a known technology of hydraulic fracturing and spent millions to develop the technology. His efforts opened the opportunity for big oil and gas companies to explore the shale gas fields such as the Eagle Ford, Bakken, Permian Basin and Marcellus.
According to the U.S. Energy Information Administration data, “the country’s crude production recently rose to the highest level since 1970. Driven by the influx in shale oil drilling and breaking a 28-year-old record, this surge will lower gasoline and oil prices, while reducing the need for U.S. fuel imports.” According to NAM (the National Association of Manufacturers), the United States will reap enormous economic and job creation benefits from domestic oil and gas production, currently resulting in more than 2.1 million jobs. By 2025, this number will reach nearly 3.9 million. These numbers may be impressive, but more importantly, the support of the U.S. government is critical in the continuing development in the oil and gas resources, energy infrastructure projects and manufacturing growth.
The recent price decline in crude oil is concerning, some oil experts say. Hopefully, the price of a barrel of oil stays in moderate range so the oil and gas industry will continue to keep the United States energy independent.
Dicky Farmer, CBSA President and Farmer’s Copper Co-President