SUGAR LAND, Texas, Feb. 14, 2022 (GLOBE NEWSWIRE) -- Researched by Industrial Info Resources (Sugar Land, Texas)--The good news for post-pandemic increases in oil and gas supply is that rig counts are creeping upward. The bad news is that they are only creeping.
Previous commodity price rises were accompanied by corresponding rig count increases. In 2021, however, the two roads diverged as gas drillers (and their oil counterparts as well) took the road less traveled. There is no short answer as to why this is happening, but production growth is hampered by two main pushbacks, one directly related to the industry and the other common to all citizens. The first is environmental, social and governance (ESG)-related disinvestment due to climate-change concerns. The other is the combination of supply-chain slowdowns and the resultant inflation.
Shane Mullins, Industrial Info's vice president of product development for energy markets, clarified the ESG issue.
"Normally $70+ oil prices would send production soaring, and we would be scrambling to dust off plans to add more miles of pipe," Mullins said. "But the lack of available capital due to the increasing influence of the ESG movement is forcing producers to maintain capital discipline within 70% of cash flow on capex."
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