The EIA (Energy Information Agency) at the Department of Energy recently mentioned U.S. petroleum production increased 16 percent and natural gas 12 percent in 2018. The EIA said the increase was the largest petroleum and natural gas production increase from a single country in history. With that, the U.S. surpassed Saudi Arabia as the largest petroleum producer with Russia in third place.
Fantastic news for our economy and energy independence. With increased oil and natural gas, the need for infrastructure to push production to market is so much greater. As we’ve reported over the last year, several pipelines have come online, several are near completion and there are still more to come in 2020. Liquefied natural gas exports increased this summer setting new records. A couple of new LNG facilities are scheduled to start production later this year.
Still yet, great news, our industry is humming along, collecting modest gains. The Anadarko/OXY merger was also exciting news for the industry. However, there is still caution coming from major oil producers, even independents, to keep CAPEX under control. Every segment of the industry is on watch to reduce spending, maintain a positive cashflow and produce results. That’s the right approach as we head into 2020, an election year, and faced with an uncertain trade war. E&P bankruptcies are on the rise and there has been an increase in M&A activity in the services, equipment and supplies side of the business. All signs that the industry has an increased appetite for change and adjustment. So, the good news is we’re energy independent and producing more oil and gas, the bad, well, I guess only 2020 will tell.