WASHINGTON, Jan. 20 (UPI) -- The powerful American Petroleum Institute said the upstream energy sector was in decline and it was restrictive regulations that were to blame.
API estimated the number of oil and natural gas wells completed in the fourth quarter dropped 51 percent year-on-year. Hazem Arafa, director of statistics for the industry lobbying group, said growth in exploration and production was in part what sparked the U.S. shale boom that led to exponential increases in oil and gas production.
"We can't expect that growth to continue if our own outdated energy polices stand in the way," he said in a statement. "Reducing unnecessary regulations and speeding up permitting on federal lands will help U.S. producers to compete effectively in the global market under the low-price environment."
API in response to an early 2015 report suggesting U.S. crude oil production peaks at 10.6 million barrels per day in 2020 and then fades by 2040 to 9.4 million bpd said more energy, not less, was the answer to a struggling U.S. energy sector. Higher domestic production meant less of a reliance on imports from adversarial nations like Venezuela, the group said.
Crude oil prices are off more than 40 percent from this date in 2015 as weak economic growth leaves markets skewed heavily toward the supply side. That's left energy companies with less capital to invest in exploration and production, adding to constraints on output.
API data show oil well completions were bearing the brunt of the market downturn. In an annual report released last month, the Organization of Petroleum Exporting Countries one of the better indicators on the resiliency of the energy market was well completions. Data from OPEC show the number of completed wells is generally decreasing in all reserve basins.
API has pushed an all-access agenda in boom and bust cycles.