Market Trends of US Oil And Gas Industry
Upstream Sector Expected Witness Significant Growth
- The United States is the largest economy globally, with significantly higher energy consumption. The country enjoys sizable oil and gas reserves that it is exploiting to fulfill its demands.
- The United States became one of the world's top crude oil producers in 2018 and maintained its leading position in 2021. It accounted for 18.5% of the global crude oil production in 2021, which accounted for 16,585 thousand barrels per day.
- In February 2022, BP PLC announced the start of the Herschel Expansion project in the Gulf of Mexico. Herschel was the first of the four major projects to be delivered globally in 2022. Phase 1 of the project comprises the development of a new subsea production system. At its peak, the first well is expected to increase the platform's annual gross production by an estimated 10,600 barrels of oil equivalent a day.
- In December 2021, ConocoPhillips started production at its GMT-2 oil project in the National Petroleum Reserve-Alaska. The project was expected to produce 30,000 b/d at its peak. The development costs for the project were USD 1.4 million.
- Thus, due to the abovementioned factors, the upstream segment is likely to witness significant growth during the forecast period.
Understand The Key Trends Shaping This Market
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Investment in Renewable Energy to Restrain the Market
- The oil and gas industry is a significant contributor to emissions from the production and consumption of petroleum. To limit these emissions, the US government is decreasing its reliance on oil and gas and shifting its focus toward building renewable energy sources to fulfill its needs. As of 2022, the United States installed renewable energy capacity had reached 351.67 GW.
- The oil and gas sector's carbon footprint (operations and emissions from energy consumed) is at least 2.6 billion tons annually, out of the 37.1 billion tons produced by human activity.
- In February 2022, California's Imperial County approved a plan for the development of the Lithium Valley that includes geothermal energy production. The geothermal production in the county may expand to between 1,500 MW and 3,000 MW over the next two decades, as there is an estimated 1,000-1,500 MW of additional generation available.
- In January 2022, the US House of Representatives unveiled the America Competes Act of 2022, which seeks to bolster the country's supply chain and competitiveness and includes USD 3 billion for solar manufacturing.
- Thus, the increased focus and spending on renewable energy generation may restrain the US oil and gas market.
