Oil Production Flat in the U.S. Despite Increased Global Investments. Wall Street, Tough Regulations, and a Dry Workforce Are Behind the Stall.


OPEC’s longstanding warnings about global underinvestment in oil and gas production are now juxtaposed with an uptick in the energy industry’s spending. In fact, Goldman Sachs reports there has been a 25% increase in major oil and gas production projects since 2020, amounting to 70 projects.

The U.S. stands in stark contrast to this global increase in gas and oil production spending. Energy firms domestically, for example, are reducing oil rigs for an eighth consecutive month. Why the reduction when the majority of U.S. voters believe domestic oil and gas production can reduce energy prices and bolster security?

A peek into some of the factors the U.S. oil production industry grapples with include Wall Street challenges, stringent federal regulations, and a dry oil production workforce. Ron Ness, President of the North Dakota Petroleum Council helps break down these constraints and explore how the U.S. can pivot to match global investments.

Ron’s Thoughts:

“The market is really not incentivizing rapid production growth by the producers. Wall Street has determined that they want a return on investment. They’d rather have you stay within cash flow and provide that ROI.

Regarding the drop in the oil rig activity in the U.S., the oil rig numbers are really not the best barometer of measuring the activity of industry any longer. The efficiency of a drilling rig today, you can do substantially more with one rig, than you could just pre-COVID.

Secondly, in the Bakken, we are drilling three-mile laterals now versus two-mile metals. So, essentially, every drilling rig is drilling another half a percent more wells per month, just with that three-mile versus two-mile laterals. So, you really need to look at the well completions that are taking place or the amount of footage being drilled across the U.S. I think both of those, slight decline, but, continued fairly steady throughout this year.

In regards to the oil production, the market is really not incentivizing rapid production growth by the producers. Wall Street is determined that they want a return on investment. They’d rather have you stay within cash flow and provide that ROI. Additionally, very, very challenging federal regulations. These are having an impact on our industry.

Week after week, the Biden administration rolls out punitive regulations against our industry. I think that inhibits investment and certainly restricts some of the areas that you can drill new wells in this country.

Additionally, we are having a huge challenge with workforce in North Dakota, the Bakken, and we are out, looking globally to recoup workers to North Dakota and the Bakken. This challenge is real. It’s acute in our industry, specifically, in terms of the number of people across America wanting to work. It just seems that it’s functionally changed since COVID.

So, these are some of the challenges, but overall, I think flat production with slight growth in the Bakken, is really putting oil producers where they want to be in terms of staying within their budgets, attracting the capital they need to attract. And I think nationally, we are staying within the window of production meeting demand. So, certainly, we always like to see more production and more activity, but I think for now, things are cruising along just fine. But certainly, those federal policies are going have an impact.”

Article written by Cara Schildmeyer.

Follow us on social media for the latest updates in B2B!



Next generation of security solutions
The Future of Security: Discovering the Next Generation of Security Solutions at ISC West
April 23, 2024

The recently concluded International Security Conference & Exposition West 2024 (ISC West) proved to be an indispensable platform for discovering the next generation of security solutions, providing attendees with invaluable insights into the future of the industry. At a recent episode of MarketScale’s roundtable show Experts Talk, Cathal Walsh, Vice President and Chief Security […]

Read More
Cyber Resilience: To Protect Corporate Assets, Businesses Must Invest in Cybersecurity Training
April 23, 2024

As cyberattacks occur at increasing frequency, cybersecurity has become a cornerstone of corporate security strategies across all sectors. With businesses increasingly reliant on digital infrastructures, the quality of a company’s cybersecurity training is no longer just an operational requirement — it is a strategic asset. The stakes are high, as a breach can lead […]

Read More
Forming Relationships with Industry Insiders Can Quell Sales Cycles and their Length of Time
April 23, 2024

New companies are facing more and more challenges in the security industry as sales cycles are experiencing lengthier times. One of those reasons is due to the complexity of the security industry itself, along with the unique and special business models every new company will come in with. But there is a solution to […]

Read More
Cyber-first approach
From Bollards to Bytes: Why Security Firms Need to Adopt a Cyber-First Approach
April 23, 2024

How can the security industry effectively navigate the shift from traditional physical security measures to adopting a cyber-first approach in its sales and integration strategies? The transition from physical to digital security solutions was a major theme at the International Security Conference & Exposition West 2024 held earlier this month. On a recent episode of […]

Read More