By Alice Seeley
As oil prices continue to increase with all Russian oil and gas imports banned in the U.S., American energy producers warned that ramping up U.S. oil production to combat rising prices may be easier said than done.
“It’s not just turning a switch like they think,” President of the Louisiana Oil and Gas Association, Mike Moncla, stated.
A year ago, American oil companies struggled to survive and stored rigs that were not in use. Moncla explained that “when metal stacks, in this humid, south Louisiana environment, you get rust.” To repair a rusted rig engine can cost anywhere from $75,000 to $125,000. Oil companies must make the hard decision to either fix all the rusted rigs or only repair a few. Many companies choose to repair only the bare minimum out of fear that the domestic oil demand will sink again.
American oil companies not only need hundreds of thousands of dollars to repair essential equipment, but they are also in desperate need of more employees. The low demand for domestic oil sank the oil industry for several years after Saudi Arabia flooded the oil industry. The few American oil companies that survived laid off most of their workers.
“We had 633 employees just seven years ago,” Moncla said. “We got all the way down to 150, and today we’re back up to 300.”
The oil companies are hiring more employees, but it takes time to train them.
In Louisiana, drilling requests and rigs are operating at a new record high. In 2020, only 26 rigs were operating in Louisiana. This year, there are nearly double the operations running and more permit requests waiting for approval.
“The industry saw a recovery in demand, they saw an increase in the price they were getting, so they started drilling more,” Patrick Courreges, communications director for the Louisiana Department of Natural Resources, stated.
