A look back on 2023 and ahead to 2024

Fri, February 23, 2024

By Ed Longanecker, President of the Texas Independent Producers & Royalty Owners Association

As our industry navigates the ever-evolving energy landscape, I wanted to take a quick look back at 2023 and highlight what we can expect in 2024. 

On the heels of a record-breaking year for our industry, EIA’s recent Short-Term Energy Outlook identified continued positive trends for the oil and natural gas industry in 2024, including increases in production and consumption.

Despite the most recent politically motivated action by the current administration, LNG will continue to play a crucial role in global energy markets through 2024. Last year saw a record-breaking number of exports, with large volumes expected to continue as additional terminals come online and demand for the fuel remains high amid geopolitical tensions.

New advancements in technology and an economic reality that is playing out with other energy sources, combined with the industry’s commitment to producing responsibly, demonstrate that natural gas will remain one of the cleanest and most sensible energy alternatives. A recent analysis by TIPRO’s Texans for Natural Gas (TNG) education campaign also found significant success in emissions reduction efforts amid record production. More on that in a moment.

EIA’s positive outlook, combined with the Permian’s success in reducing emissions while hitting record production numbers are clear indicators of the industry’s commitment to meeting demand, operating responsibly, and delivering energy security for our country, allies and trade partners abroad. Not surprisingly, these accomplishments, and the critical importance of our industry in every facet of life, continue to be blatantly ignored by the mainstream media, biased environmental NGOs, and some elected officials. Regardless, energy education remains a top priority for TIPRO.

American-made natural gas is recognized as some of the cleanest natural gas in the world. In the latest report, Permian Basin Producer’s: Charting A Cleaner Energy Future, we highlighted the significant decrease in methane intensity and flaring that the Permian Basin achieved over the past decade. Between 2011 and 2022, Permian Basin methane emissions intensity fell by nearly 85 percent. Yet since 2011, total oil and gas production increased by over 416 percent.

Flaring intensity in the Permian Basin has also decreased 66 percent since the Basin experienced record flaring in 2019. West Texas now stands apart, remaining well below the flaring intensity of other global producers. In 2022, flaring intensity was 915 percent higher in Russia and 242 percent higher in Venezuela than in the Permian.

Geopolitical tensions around the world continued to be a prevalent issue with conflicts in the Middle East and Ukraine fostering uncertainty and volatility of global energy markets. For the second year in a row, Europe remained the largest importer of U.S. LNG, accounting for 68 percent of U.S. LNG exports in December 2023. In the first half of 2023, U.S. global LNG exports averaged 11.6 bcf/d with net natural gas exports (LNG and pipeline) hitting a record of 13.6 Bcf/d.

American LNG, driven in large part by Texas natural gas production, continues to be an essential resource for our allies, as they work to meet heightened energy demand while shifting away from their dependence on Russian energy supplies. In 2024, LNG exports are expected to average 12.1 bcf/d. Ironically, the “pause” on U.S. LNG permits will only benefit countries like Russia and Qatar, at our detriment, while sending a signal to allies around the world that the U.S. is an unreliable trade partner. We remain aligned with a bi-partisan group of Congressional leaders to reverse course on this short-sighted decision.

The growth of domestic natural gas markets is closely reflected in increased U.S. LNG exports as well. The capacity to export LNG competitively on the global markets hinges upon the ability to maintain and grow production of natural gas domestically.

In 2023, increases in natural gas production were essential to fulfilling rising energy demand within the U.S. As extreme weather and record-breaking temperatures swept the nation in the winter and summer, America turned to natural gas. Thanks to record production averaging 104 bcf/d, driven primarily by the Permian’s improved well-productivity, domestic demand was met, and natural gas continued to supply affordable and reliable power to thousands of U.S. homes.

Texas remains the top oil and gas producer in the country, achieving another record production year. In 2023, U.S. crude production averaged 11.2 million barrels per day (b/d) and hit an all-time high in December with more than 13.3 million b/d, according to EIA. Texas’ Permian drillers were largely responsible for these record numbers, producing 5.63 million b/d. America’s strong output helped stabilize global energy markets as Saudi Arabia and Russia cut their production. U.S. crude output is set to remain strong in 2024, with February reaching highs of 13.3 million b/d and expectations for 2025 to deliver similar results. 

It's interesting to note that the Department of Energy’s website still contains content highlighting the economic benefits of oil and natural gas. Yet another irony, as we endure a multitude of challenging policy decisions from Washington. In the coming weeks, TIPRO will release its latest State of Energy Report, which will expand upon the numerous benefits, conveniences and protections afforded to all Americans by the U.S. oil and natural gas industry.

Despite facing significant uncertainty from a regulatory standpoint and numerous market factors that could impact supply and demand, I am confident that Texas operators will once again rise to the occasion. TIPRO remains a credible source of information and will continue to advocate on your behalf at all levels of government.