In recent weeks, a handful of timid investors have stirred up controversy in the oil markets by suggesting that the international price of oil was due to crash in the coming months. That prediction may prove true for some countries in the coming months, but the strength of the United States’ production power shows no signs of letting up or crashing down.
The Rolling Tide
On Tuesday, the Energy Information Administration announced that the United States has officially become the world’s largest producer of petroleum and natural gas, concluding one of the most massive year-over-year increases in production by a single country in history. In 2018, US oil production increased by 16% while natural gas production increased 12 percent.
According to one expert, if production continues at the rate it’s going, the United States could account for about 61% of the world’s extracted oil and gas by the year 2029.
In It for the Long Haul
Even as production ramps up in states throughout the American Southwest, concerns over the rising and falling price of oil and natural gas are evaporating in the communities that swell and contract based on oil booms and busts. The reason is a series of initiatives undertaken by the state’s wealthiest citizens and major firms like Exxon and Chevron.
The goal of these strategies is to draw families to oil and gas communities by improving the overall quality of life. In Midland, Texas, for example, one such collective donated $38.5 million to fund “14 tuition-free charter schools.”
It’s a signal to the citizens that the days of boom and bust are over, that the new plans for US oil production are proactive, not reactive.
A Learning Moment
It would appear that the prolonged oil bust of 2014 was a learning moment for oil and gas companies across the United States. Their response to the crisis was to implement plans that account for the uncontrollable ebb and flow of oil prices around the world. The result is that towns throughout the American Southwest are earning a long-term lease on life as oil and gas companies invest in their future.