President Joe Biden’s move to ban Russian oil imports, encountered Republican demands to boost U.S. production to address high gasoline prices. The White House, too, called for more drilling, citing the war and shelving Biden’s campaign pledge to curb drilling on public lands because of climate change.
The ramping up of U.S. crude output is however at odds with the industry’s reality of a shortage in workers to rapidly expand, scant money to invest in drilling and wariness that today’s high prices won’t last, according to industry representatives, analysts and state officials.
The U.S. doesn’t import much Russian oil and Biden’s administration has effectively halted new oil or natural gas lease sales from federal lands and waters. But it’s approved almost 4,000 new drilling permits on federal lands and companies have thousands more stockpiled. White House spokesperson Jen Psaki said companies should use those permits to “go get more supply out of the ground.”
Federal energy reserves account for about a quarter of U.S. oil, with the remainder coming from private, tribal and state land.
Pumping rates overall slowly increased during Biden’s first year as the industry climbed out of the pandemic, when oil future prices briefly dipped below $0 a barrel.
In the short term, the world’s looking to other sources. Proposals by member nation to urge OPEC to consider boosting oil output, sent oil prices tumbling. Saudi Arabia alone has roughly 2 million barrels a day of additional capacity standing by, said Rice University energy researcher Jim Krane to Associated Press.
By comparison, total U.S. production last year was about 11 million barrels a day.
If the conflict in Ukraine slogs on, prices stay high and the logistical hurdles are overcome, companies could move into relatively untapped fields, including Wyoming’s Powder River Basin and Utah’s Uinta Basin.
But it won’t be anything like booms that swept through those regions over the past decade, drawing thousands of workers who overwhelmed housing and other services and transformed rural communities into centers of industry.
-AP