Oil industry hopes increasing U.S. production can slash gas prices
WASHINGTON (Gray DC) - Hitting the road has become more expensive for many businesses, especially moving companies like OMX.
“We travel a lot,” OMX Vice President Jim Durfee said. “Trucks eat a lot of gas.”
Durfee said increasing fuel costs could result in businesses cutting employee wages or even jobs.
“The biggest overhead is our building, and the second is our employee cost,” Durfee said. “We can’t get rid of the building. We finally had to institute a fuel surcharge.”
For now, OMX is adjusting to increasing prices the same way many other companies have, by passing the price to customers.
According to the American Petroleum Institute, gasoline prices are often governed by simple supply and demand. API Senior Vice President Frank Macchiarola said if the U.S. produces more oil, prices at the pump will decrease.
“It is important that we produce more energy here in the United States, that we ramp up supply,” he said.
Macchiarola said the Texas Permian Basin is leading the charge by producing more oil than anywhere else in the U.S. Rep. August Pfluger (R-Texas) said the Permian Basin’s success is a result of innovation and hard work.
“They’ve stepped up even with less rigs and less people,” Pfluger said. “The innovation has allowed the production to exceed 5 million barrels a day. That’s nearly 40% of the U.S. production.”
But Macchiarola said there are limits to how much oil production can expand, partially due to supply chain issues.
“You’re seeing difficulty getting frack sand,” Macchiarola said. “So sand to frack wells.”
Macchiarola said the U.S. has still not been able to reach the oil production seen before the COVID-19 pandemic began.
Copyright 2022 Gray DC. All rights reserved.