US crude oil production will hit record high of 13.3 million b/d in Q1, 2024 – WoodMac

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Wood Mackenzie forecasts United States crude oil production will reach a new record high of 13.3 million barrels per day (b/d) by the first quarter of 2024. This represents an upward climb since Joe Biden assumed the presidency. 

In a recent analysis, WoodMac’s Americas Vice-Chair, Ed Crooks, reminded that when Biden took office in the first quarter of 2021, oil production averaged 10.8 million b/d, moving up to average 12.4 million b/d in the first quarter of 2023. 

Crooks said while there was speculation that Biden’s inauguration meant the country’s oil and gas production would take a hit, as he promised a shift away from fossil fuels, that has not materialised so far. 

While the growth was not due to actions taken by the administration, Crooks reminded that the Department of the Interior took a decision to approve a development plan for ConocoPhillips’ Willow project in the National Petroleum Reserve in Alaska. This project will add 180,000 b/d to US crude oil production. Seemingly in response to critics of the project, the Department explained that it substantially reduced the scope of the project. But according to Wood Mackenzie, while the number of pads and wells at Willow has been reduced, the wells will be longer and bigger. So, production and reserves are not really affected, even though the above ground impact is reduced. 

In late 2022, the White House said that it would encourage firms to invest in production to improve US energy security and bring down energy prices. WoodMac said that even before the administration declared its support for oil production, the number of approvals for permits to drill on federal lands in the lower 48 states were rising sharply as far back as June 2021. WoodMac said it did not look like the behaviour of an administration determined to use every tool at its disposal to choke off US oil output. Wood Mackenzie said environmental campaigners are leveling a charge of hypocrisy at the feet of President Biden, who has set goals to reduce US greenhouse gas emissions by 50% from 2005 levels by 2030, and to net zero by 2050. But beyond that, developing countries like Guyana and Suriname, now looking to tap their hydrocarbon resources, may also see hypocrisy in the US government’s approval of the Willow project.

When the approval was announced, energy and commodities columnist at Bloomberg, Javier Blas Tweeted: “Now, go and tell developing countries that they should not develop their own fossil fuel resources.” 

But since the war in Ukraine, there seems to be a general understanding that circumstances have changed. The developing world and developed countries like the US appear to now understand the pressing need to reduce pressure on consumers by prioritising energy security.

Guyana’s President, Dr. Mohamed Irfaan Ali and the Vice President, Dr. Bharrat Jagdeo, have repeatedly criticised calls by the Global North for developing countries to leave their oil in the ground, aven as the developed world ramps up production to meet their own energy needs. Guyana has touted a balancing act of rapid oil development while still remaining carbon neutral due to its tremendous forest endowment. The country reports as a carbon sink, and according to Vice President Jagdeo, it intends to stay at that level. Guyana has said that it has a right to develop its petroleum resources and that it intends to be one of the last producers of oil as the world transitions to net zero. 

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