There’s a lot of discussion today about the oil and gas industry. The rise in gas prices for the average American has become quite the topic of conversation. The industry outlook is somewhat uncertain at the moment, given recent events happening in Russia and Ukraine. We thought we’d take a moment and look at the significance of this industry and how it forms part of our society.
The Vast Oil and Gas Industry in the United States
According to the American Petroleum Institute, the industry supports about 9.8 million jobs, which is the equivalent of about 5.6 % of total U.S. employment. That involves people working in a variety of capacities and roles throughout the energy sector as it relates to the extraction of oil and natural gas. Some might argue that numbers are even higher if you count the various industrial services and supportive roles companies play.
In 2020, the United States was the largest crude oil producer in the world. It gained and has held this position since 2018. Although every state is different, crude oil is produced in 32 U.S. states as well as coastal waters.
Oil production is a complicated and vast operation that is divided into three segments: upstream, midstream, and downstream. First (upstream) are the exploration and production companies that find the reservoirs, then (midstream) companies that transport the product from wells to refineries, and finally (downstream) companies that are responsible for the refining process and the sale of the final product.
Oil and Natural Gas Exports and Imports
High inflation and rising energy prices have recently brought to attention the nature of U.S. imports and exports. The U.S. both imports and exports petroleum. The term refers to crude oil and refined products that include gasoline, diesel, jet fuels, and other products.
The U.S. demand and need for oil and petroleum products is vast, which is why even though we produce here at home, we still need to import a lot of oil. In 2017, imports provided 19% of the country’s demand for petroleum.
The Top Oil-Producing States in the Nation
While the United States produces a lot of crude oil, there are several states that lead in the production. The top U.S. oil-producing states in America are:
- Texas. The Lone Star State leads the charge in oil production in the nation. The state has 31 petroleum refineries. These refineries can process about 5.9 million barrels per calendar day. The state also produces more electricity than any other state.
- North Dakota. While most of the time when people think of oil refineries, they think of Texas, the state of North Dakota is the runner-up. Although compared to Texas’ 1.78 billion barrels of oil in 2020, North Dakota’s 434.89 million barrels is considerably far behind.
- New Mexico. The thirst oil-producing state in the U.S. is New Mexico, producing 370.40 million. The state saw an uptick in production from 2019 to 2020, even after the pandemic suppressed demand.
Top 10 Oil Producers in 2020
Oil production is a vast part of the economy, not just for the U.S. but for the entire world. The top 2020 oil producers in the world are:
- United States 19.51 million bpd
- Saudi Arabia: 11.81 Bpd
- Russia: 11.49 million bpd
- Canada: 5.50 million bpd
How the Situation in Ukraine is Posing Serious Questions
The actions of Russia have sent reverberations across the world. Americans are seeing disturbing images of a nation that has been attacked unprovoked, and it has prompted serious questions about if, when, and how the U.S. should step in. On March 8th, 2022, President Biden announced that he would discontinue imports from Russia as a way to put pressure on the country. As the Wall Street Journal reports, America gets most of its crude imports from Canada, Mexico, and Saudi Arabia but was — up until recently— still importing about 7.9% from Russia.
This will affect prices here at home, and how the economy and the oil industry will self-correct is still to be seen. And without getting into political fights, it would be difficult to ignore the real-world repercussions and the effects on the oil and gas industry.
Industrial Services in the El Paso region for Mining, Oil, and Other Industries
The world is interconnected, and as we see one part of the world in chaos, it is likely to reverberate at home. We work side by side with the oil industry to provide field services, repairs, and product rehabilitation for infrastructure used by the oil and gas industries. We continue to monitor the situation closely.
It’s likely the industry will see higher demand in the coming months. Do you want to learn more about what we do? Call (915) 593-8833 today.