WASHINGTON – April 8, 2020 – U.S. independent producers of oil and gas are taking action and responding to the markets to protect their businesses, their workers and their communities, amidst the supply/demand crisis the U.S. shale industry is facing. Data from IHS Markit shows that U.S. independents combine to produce about 83 percent of all U.S. production.
“Many U.S. producers, responding to market factors, have announced significant capital reductions. And, as a result, production will go down. The most recent EIA forecast shows U.S. crude oil production down to just over 11 million barrels per day in the fourth quarter of 2020, a 1.8 million barrel per day or almost 15 percent reduction relative to the same period last year,” said AXPC CEO Anne Bradbury.
According to the International Energy Agency (IEA): Oil companies have responded to the price collapse by announcing large cuts to their spending on new production. The initial reductions are in the 20 percent-to-35 percent range compared with investments they had previously outlined for 2020.
The most recent U.S. Energy Information Administration Short Term Energy Outlook also states that U.S. crude oil production will decline. EIA’s outlook also underscores the negative effects of the global market manipulation under way, including the U.S. going back to importing energy from other countries, rather than being self-reliant on made-in-America energy:
The EIA “forecasts that the United States will return to being a net importer of crude oil and petroleum products in the third quarter of 2020 and remain a net importer in most months through the end of the forecast period. This is a result of higher net imports of crude oil and lower net exports of petroleum products. Net crude oil imports are expected to increase because as U.S. crude oil production declines, there will be fewer barrels available for export.
“U.S. and international experts continue to underscore the urgent need to bring some stability back to the oil and gas markets. Less than a year ago, the U.S. became a net petroleum exporter – for the first time truly giving our nation the energy independence we sought for decades. U.S. independents are committed to doing their part in providing our nation with the incredible gift of energy security and true energy independence. If we lose our energy independence, we will have to rely on oil from the Middle East and natural gas from Russia, which hurts our ability to negotiate with other countries, significantly drives up energy costs, and further hurts jobs and our economy,” said Bradbury.
AXPC continues to advocate for policies that the Administration, in coordination with Members of Congress who support American energy independence, can utilize to help alleviate the severe supply/demand imbalance currently underway – most importantly a diplomatic solution between Saudi Arabia and Russia that could help ease tensions and restore balance to global oil markets.
About the American Exploration and Production Council:
AXPC is a national trade association representing 25 of the largest independent oil and natural gas exploration and production companies in the United States. Dedicated to safety, science, and technological advancement, AXPC members strive to deliver affordable, reliable energy to consumers while positively impacting the economy and the communities in which we live and operate. Learn more at https://www.axpc.org/