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Shale progress needs to continue, API says

American Petroleum Institute reports steep declines in U.S. oil and gas activity.

By Daniel J. Graeber
American Petroleum Institute reports steep year-on-year declines in oil and gas activity in domestic shale basins, calling for a rethink of national energy priorities File photo by Gary C. Caskey/UPI
American Petroleum Institute reports steep year-on-year declines in oil and gas activity in domestic shale basins, calling for a rethink of national energy priorities File photo by Gary C. Caskey/UPI | License Photo

WASHINGTON, April 6 (UPI) -- A rethink of current energy priorities and policies may be necessary to give further momentum to the U.S. shale oil and gas sector, an industry group said.

The American Petroleum Institute, which compiles data and represents the interests of the oil and natural gas sector, said well completions for natural gas were down 70 percent and for oil by 90 percent when compared to first quarter 2015.

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Hazem Arafa, director of statistics for the API, said in a statement growth in shale has led to lower energy prices, which are acting as a de facto stimulus for most American consumers.

"To continue this progress, we must revisit current energy policy, speed up the LNG export approval process and avoid unnecessary regulations to help U.S. producers to compete effectively in the global market under the low-price environment," he said.

According the API, the industry supports 9.8 million jobs and represents 8 percent of the U.S. economy.

Lower crude oil prices have left energy companies with less capital to invest in exploration and production, the upstream side of the industry. Oil field services company Baker Hughes reported last week the number of rigs deployed in the United States fell to their lowest level in more than 60 years.

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The rig count in North Dakota reported by Baker Hughes last week fell by 2 to 29, one of the lowest levels in years. The rig count in Texas, the top oil producer in the United States, was down 5 to 204.

Both state economies have faced pressure from declines in the energy sector.

API in the past said exports of oil and gas could help stimulate the domestic market. Freeport LNG Development is to build a plant in Texas capable of processing 1.8 billion cubic feet of natural gas per day for exports to countries with and without free-trade agreements with the United States

Following industry pressure and support from Republicans, the White House last year signed off on a $1.1 trillion omnibus spending bill that included language that, with certain provisions, lifted a 40-year ban on the export of crude oil produced in the United States.

After the bill was signed, White House spokesman Josh Earnest said the country already exports around 4.3 million barrels per day in the form of refined petroleum products and had waivers in place to export 500,000 bpd of conventional crude oil before the ban was lifted.

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