President Donald Trump may ask oil companies to ramp up domestic production, but there isn’t much they could do that would move the needle on prices at the pump.
A shortage of ready workers and a low number of wells that could quickly start production could prove to be hurdles for a U.S. oil industry that is seeing crude prices rise to near $100 a barrel amid amid the U.S. and Israel’s war against Iran. Interior Secretary Doug Burgum has said companies may start speeding their drills to help offset higher gasoline prices, but industry analysts said increasing production could be easier said than done.
There aren’t enough workers ready to quickly head out into the oilfield, one expert said. Even if there were, it would take months to get oil flowing from new wells.
There is a shortcut, though, a reserve of unfinished wells that can be brought online more quickly. These wells have been drilled but not “completed,” something that would require fracking them, cementing a well bore in place and other actions.
The problem is that the supply of “drilled but uncompleted” wells — or DUCs — is at a low point, according to data from the Energy Information Administration. The most current figures from February show there are less than 5,000 DUCs. The number of drilled but unfinished wells peaked during the pandemic at 8,874 in June 2020. The lowest number recorded was about 4,500 in December 2013, which is as far back as records go.
President Joe Biden faced a similar problem in 2022 after the Russian invasion of Ukraine. The Biden administration urged the oil industry, then wary of Biden’s aggressive push on climate issues, to produce more oil.
At that time, there were about 40 percent more DUCs then — 7,031 to be exact — and gasoline prices still soared. Oil production rose modestly, but not in time to prevent prices from spiking to an average of about $5 a gallon in June 2022.
After that, a continued rise in production and other market forces drove the price down. By November, in time for the midterm elections that year, it was back down to about $3.80 a gallon. In December, it was $3.32, lower than it had been the year prior.
The oil industry also has fewer workers than it did in 2022, which could make it harder to complete the unfinished wells.
“From what I understand right now, the constraint to expanding activity, the primary constraint is the lack of crews,” an energy economist at Rice University’s Baker Institute for Public Policy. “That means you wouldn’t be able to activate rapid activation of all of those DUCs, even if you wanted to.”
The industry has been dealing with a shortage of skilled workers for years, with U.S. producers putting out record amounts of oil with fewer employees.
Industry officials note that a lack of workers isn’t the sole factor limiting prospects for increased production, but stress that companies need certainty to hire.
“Developing a skilled workforce is always a priority for the energy industry, and it is critical for us to bring in more skilled workers,” said Molly Determan, president of the Energy Workforce & Technology Council, a trade group representing oilfield services companies, which employ the bulk of the oil and gas production workforce. “However, the current state of the workforce is not a hard limit on production,””a stable, predictable environment allows both the workforce and production to grow simultaneously.”
About 624,000 people worked in the oil patch in February, according to the workforce council. That’s down from about 640,000 last year.
With those constraints in place, oil producers could add 200,000 to 400,000 barrels a day to current domestic production, said Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association.
“You could have incremental growth from existing production,” Longanecker said. “You could have faster new output from the DUC inventory. And the economics may make some of those more desirable.”
But that might not do much to bring down the numbers on the sign at the corner gas station. For perspective, the United States already produces more than 13 million barrels a day of oil, and consumes more than 20 million barrels of petroleum products that include products made with natural gas and other non-oil substances.
And it probably wouldn’t happen as fast as the White House would like. Andrew Lipow, head of oil market consulting firm Lipow Oil Associates, said it can’t happen quickly.
“It would take time for that supply to reach the market, and it would come to the market only as fast as the producers completed those wells,” Lipow said.
