Ukraine war ups pressure for US oil; industry faces hurdles

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President Joe Biden’s move last week to ban oil from Russia over its invasion of Ukraine was met with calls to boost U.S. production to help bring down soaring gasoline prices

to address high gasoline prices. The White House, too, called for more drilling and cited the war as it shelved Biden's campaign pledge to curb drilling on public lands because of climate change.

Republicans from energy states have brushed past the industry's logistical constraints to pin blame for slow U.S. oil growth on Democrats and Biden. Texas Sen. Ted Cruz and Montana Sen. Steve Daines have called for American energy to be “unleashed" and more public lands opened to drilling. Daines accused Democrats of using the Russia oil ban to cover up a supposed scheme to “ban all oil.”

Pumping rates overall slowly increased during Biden's first year as the industry climbed out of the pandemic, when oil future prices briefly dipped below $0 a barrel. In the short term, the world's looking to other sources. The United Arab Emirates said last week it would urge OPEC to consider boosting oil output, which sent oil prices tumbling. Saudi Arabia alone has roughly 2 million barrels a day of additional capacity standing by, said Rice University energy researcher Jim Krane.Even with favorable conditions — strong prices, political pressure and less-cautious shareholders — companies in the U.S.

Even in those areas, there's no way to simply crank open the spigot immediately. The most easily accessible reserves already have been drilled, McConn said.Some oil producing regions already were bouncing back as the industry shakes off its pandemic slowdown, particularly the Permian Basin — the nation's busiest oil patch with 45,000 wells drilled over the past decade, according to the Energy Information Administration.

Multiple factors are tempering a production boom, he said, including volatile prices, labor issues and longer wait times for parts to be fabricated and supplies shipped. Even the custom cowboy boots favored by some workers have been hard to come by.

 

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