It has been widely reported that the number of wells and rigs drilling for oil in the United States has been increasing steadily in recent years. But many of these new wells and rigs are either too deep in the earth or too difficult to drill. With many wellheads drilled to depths of more than 500 meters or more, it is not surprising that oil production continues to decline in this country. But, is the number of wells or rigs being drilled sufficient to return the US economy to its once-soaring growth rate?
For most economists, it would seem that the key reason why the US economy is facing so many problems, is the fact that the number of wells and rigs being drilled, is simply not enough to produce the amount of oil that is needed to maintain and improve our lifestyle. And without the right technology that would be required to use the newly drilled oil, there would not be enough money generated to pay the various costs associated with using it as well.
As it stands, the only thing that we have managed to do so far, in order to help with oil and gas supply recovery, is to use the increased productivity of the country’s oil and gas companies to help with energy demand recovery. This may include helping out with solar energy for residential homes, and using oil and gas plants to generate electricity for the commercial sector.
However, this is a fairly temporary fix at best, as most experts agree that oil and gas production is only going to remain flat for the foreseeable future. At some point, we will have to admit that the US economy simply does not have the necessary technology in place in order to exploit oil and gas reserves on a global scale. Until then, we will simply have to live with the fact that we can only rely on our own domestic resources in order to provide the fuel that our country needs to run its economy.
In fact, a recent study by the National Center for Policy Analysis (NCPA) found that oil and gas production could actually hinder rather than help with oil and gas demand recovery. The study concluded that increased oil and gas production would lead to an increase in overall electricity consumption, which would only add to the problem of growing fuel costs, which would have the effect of stalling demand recovery. The NCPA’s research also indicated that even if the United States was to allow a greater amount of production of oil and natural gas from its existing wells and rigs, this would only result in the need for more drilling to make up for the extra production.
So, instead of helping with oil and gas supply recovery, the United States is stuck on a plateau where the two are still not yet in synch, and in a state of relative stagnation. In other words, we are still waiting to see if the US can reverse the downward trend or continue to stave off the onset of economic disaster. Perhaps we can look elsewhere for oil and gas sources in order to help with oil and gas supply recovery.