Energy prices unlikely to budge

Whether at home or the pump, Mississippians are feeling strain on their wallets due to rising energy costs. The recent U.S. Energy Information Administration (EIA) short-term energy outlook shows oil prices up from June. 

Third quarter 2023 had gas prices averaging at $3.69 a gallon with an average season price of $3.63.

Industry leaders say the increase has been impacted by extended cuts from Saudi Arabia on their crude oil production.

On Sept. 7, the Biden Administration canceled all remaining O&G leases, issued under the Trump Administration, in the Arctic Refuge in Alaska to protect more than 13M acres in the western Arctic, according to the White House.

Factors will continue to reduce global oil inventory and put pressure to raise oil prices in the coming months. 

James Heidelberg, vice chair of the Mississippi State Oil and Gas Board, says the expectation for the state is that energy and gasoline costs will not be moderating anytime soon. He pinpoints bad federal government policy in an attempt to force “green energy” initiatives. 

Heidelberg emphasized a need in the market to invest in an array of energy, instead of a singular focus. 

Heidelberg said increased federal regulations on oil production in the U.S. has forced the country to rely more heavily on foreign markets that are limiting their supply causing prices to increase.

Global production is expected to increase by 1.4M barrels a day in 2023 and by 1.7M in 2024. That includes an increase by 1.2M for 2023 by non-OPEC countries, which includes the United States.

While solar and wind energy initiatives are moving forward, Heidelberg said it's unlikely there will be a current generation that sees the removal of petroleum-based energy in their lifetime. 

There are some "smart people" working on alternative energy production, he said. "It sounds great, but it’s just not efficient enough" right now. The need is for more energy in the U.S. "at a fair cost.”

Heidelberg believes that the free market will correct itself if given the chance. 

While increased costs have impacted consumers, the state of Mississippi is rising to meet the demand. The increased cost of oil has allowed the state to produce more by utilizing more wells that were previously not utilized because it was not financially sound when gas prices were lower.

Mississippi is ranked #12 in the U.S.-based on Barrels of Equivalent (BOE) produced through April 2023. The state has a total of 34,807 wells which is up from last year, with 2,663 producing. In those, 1.2 million BBL of oil have been produced in the state as of April 2023. 

In comparison, the leader of oil production in the U.S. is Texas at 126.8M barrels this year. (Magnolia Tribune 09/07/23) High energy prices unlikely to budge as policies stifle production - Magnolia Tribune