Wyoming’s energy economy appears to be recovering from the 2020 downturn sooner than expected, according to a recently released report from the Wyoming State Geological Survey (WSGS).
Oil production reportedly improved by 31 percent with production coming online from both newly drilled wells and existing wells completed through the Wyoming Energy Rebound program, per the report, boosting the state’s economic outlook after a severe energy downturn in 2020.
As things currently stand, Wyoming’s oil and gas industry is on track for continued improvement heading into 2022, according to Dr. Erin Campbell, state geologist and WSGSS director.
“Production increased gradually in 2021 due to price volatility and demand uncertainty,” Campbell said in a statement. “But recent forward-thinking projects have improved the outlook for Wyoming’s oil and gas industry into 2022 and beyond.”
International players, despite Wyoming’s landlocked location and distance from shipping ports, affect Wyoming oil with global production not keeping up with recovering demand resulting in oil prices increasing significantly in 2021, the report states.
In 2021, the price per barrel of oil increased from an average of $52 in January to $72 in December with oil prices reaching a seven-year high.
Higher prices, the report continues, fueled an increase in the number of operating drilling rigs. As of Jan. 11, the number of rigs operating in the state continued to increase with 18 operating at the end of 2021, per the report.
Emission control came into play as well with several oil and gas companies taking it to the next level in terms of carbon emission control. One company, Jonah Energy, which operates the Jonah gas field outside of Pinedale, was reportedly the first to report its emission control data to the Oil and Gas Methane Partnership, earning the company a Gold Standard emission rating, according to the report.
Jonah’s efforts are being followed up by other gas producers in the state to curb their carbon emissions with Wyoming uniquely poised to be a leader in the future of carbon capture and storage (CCUS) with the Wyoming Integrated Test Center (ITC) in Gillette and the Wyoming Pipeline Corridor Initiative (WPCI).
The latter was approved by the Wyoming legislature that first appropriated funds for the initiative in 2012 with the U.S. Bureau of Land Management (BLM) designating more than 1,100 miles of federal lands across Wyoming as corridors for potential new pipelines, WSGS says.
Pipeline infrastructure plays a pivotal role in connecting oil and gas producers with markets, processing plants, and refineries, according to the report, which states that several new Wyoming pipeline projects ranging from the Cowboy State to Montana, Idaho, and Colorado.
The WPCI is expected to optimize future pipeline construction timelines through designated corridors, per WSGS, which adds that the initiative should help the oil and gas industry capitalize on these new connections to transport products within and out of Wyoming.
Both the ITC and the WPCI give the state an opportunity to lead in carbon capture from industrial facilities, the report states, via geological carbon sequestration and finding a beneficial use of carbon dioxide in enhanced oil recovery.
Currently, Wyoming is one of two states with a regulatory program for injecting CO2 into deep geological formations, per the report.
Existing infrastructure, extensive resources, strong industry connections, and forward-looking innovations should ensure that Wyoming’s oil and gas industry remains in the foreground of U.S. energy production well into the future, per WSGS.