Los Angeles oil producers warn that boosting domestic production won’t be an instant fix
BATON ROUGE — Calls for a ban on Russian energy imports were replaced on Tuesday with calls for greater energy independence as another spike in fuel prices looms.
“We could probably get closer to energy independence on our continent again,” said Mike Moncla, president of the Louisiana Oil and Gas Association. “Corn, [we’ve got to] open the Keystone pipeline. [We’ve got to] accept oil from Canada.
For the United States to wean itself off foreign oil, Moncla says, getting more domestic platforms up and running is crucial. This process is already underway.
“Since, really, probably last year, we haven’t done anything but increase platforms,” Moncla said. “We are doing it. With commodity prices where they were, it will get the oil companies back to work.”
According to the US Energy Information Administration, 601 crude oil and natural gas rigs were operating in January 2022, the highest number since March 2020.
The number of platforms used has increased every month since September 2020, after nearly two years of declining numbers.
Moncla cautions, however, getting more rigs up and running or reopening in Louisiana and across the country is no easy task.
“You can’t just put a platform back in place,” Moncla explained. “All the valves are rusty. There is so much to invest in getting the rig back to working order as a contractor, not even an oil company.
Even then, there are still steps to be taken before drilling can begin.
“An oil company always has to get a lease, get a rig, go drill it,” Moncla said. “If they make a well, then they can produce it. If they don’t, then it’s a dry hole. There’s a lot more to it than just, as you said, flipping a switch.”
Another challenge right now, Moncla says, is finding the right drilling personnel.
“Not just anyone can operate a drilling rig,” he said.
As production attempts to reach pre-pandemic production levels, Moncla warns that it will take some time and once a rig is live, it won’t necessarily stay there.
“Every day the wells that were producing are no longer producing,” Moncla said. “New wells are coming in, so it’s not like the wells stay where they are, and each new well is more productive. [There are] ebb and flow in this production. »
To eventually lower prices at the pump, Moncla says increasing the number of open rigs and authorized drilling leases is essential.
“We have an offshore lease ban here in Louisiana where President Biden canceled the last lease sale we had,” Moncla said. “The [are] a lot of moving parts, but we need to take the foot out of the throat of the oil and gas industry and let them get back to work. »