The report, which was commissioned by the Independent Petroleum Association of America, finds that these independent producers – companies that do not have midstream or refining operations – develop nearly 91 percent of U.S. oil and natural gas wells, accounting for 83 percent of U.S. oil production and 90 percent of U.S. natural gas and natural gas liquids (NGLs) production.
Independent producers supported nearly 4.5 million jobs and contributed $573 billion to the U.S. economy (2.8 percent of U.S. GDP) in 2018. Economic contributions from these producers are projected to account for three percent of U.S. GDP by 2025, with their capital investments increasing by 87 percent over this time period. As IPAA President and CEO Barry Russell explained,
“Independents continue to play a major role in America’s natural gas and oil industry. Their entrepreneurial spirit and willingness to take on risk spawns innovation – like opening up shale plays – while creating jobs and contributing to U.S. gross domestic product (GDP). With these companies making up 90 percent of U.S. natural gas activity, their production is a critical component in supporting regional and local economies, maintaining strong national security and the effort to tackle global climate change with improved technology and efficiency.”
Independent producers accounted for about 83 percent of oil production in 2018, with 95 percent of this production taking place in just 10 states. Thanks to booming production in the Permian Basin, Texas leads the way with 42 percent of all oil production. The report estimates the Lone Star State will continue to dominate the field through 2025.
Total U.S. production is expected to continue to increase 35.4 percent by 2025, with New Mexico’s production estimated to double in that time. Mid-sized independents will see the largest increase at 49.1 percent, followed by small independents.
Natural Gas and NGLs Production
Ten states also currently account for 92 percent of all U.S. dry natural gas and 96 percent of all U.S. NGLs production. Natural gas and NGLs production are expected to increase 14.2 percent and 39.6 percent, respectively, from 2018 to 2025. Mid-sized independent producers currently contribute the biggest share of dry natural gas production at 30.0 percent and will see their share increase by 1.4 percent in 2025, according to the report.
Texas will continue to lead the natural gas field as well contributing 27 percent of all U.S. natural gas and 47 percent of all NGLs production by 2025. Pennsylvania will also remain a significant natural gas producer, with the current 15.6 billion cubic feet per day (bcf/d) rate expected to increase to 18.5 bcf/d, or by about 21%, by 2025.
Read the full report here.
This post appeared first on Energy In Depth.