U.S. Boosts Wind Power, Sets Oil Production Record

(Image credit: Getty Images)

published 28 July 2023

To help you understand what is going on in the energy sector and what we expect to happen in the future, our highly-experienced Kiplinger Letter team will keep you abreast of the latest developments and forecasts (Get a free issue of The Kiplinger Letter or subscribe). You'll get all the latest news first by subscribing, but we will publish many (but not all) of the forecasts a few days afterward online. Here’s the latest...

Wind Power
One beneficiary of the recent federal boost to domestic manufacturing: the wind power sector. The Inflation Reduction Act, passed last year, extends two key renewable energy tax credits through 2024, then replaces them with a slew of others, including the Advanced Manufacturing Production Credit.

Manufacturers have responded immediately to the new federal incentives, restarting idled plants and readying new investments. U.S. manufacturing capacity for wind turbine blades (which fell by 50% from 2020 to 2021, or 9 GW to 4.6 GW) was hit hard by the pandemic, as well as the expiration of key federal tax credits.

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The U.S. wind power market is now expected to double in size by 2030. The country currently boasts more than 140 GW of total installed wind capacity. Wind is already the largest source of renewable electricity in the U.S.

Oil Production
The number of rigs drilling for oil and gas in the U.S. continues to decline. The current total: 675, down from 680 a week ago and 756 a year ago. The U.S. rig count has declined in 10 of the last 11 weeks.

The Permian Basin, America’s most productive oil-and-gas-producing region, has also seen the number of rigs operating there drop — to 337, from 342 last week and 350 a year ago. The trend reflects drillers’ ongoing focus on boosting shareholder returns instead of expanding output, as well as uncertainty about the economic outlook.

The industry remains much more cautious than before the pandemic, as evidenced by the U.S. rig count’s slow recovery over the last few years. For perspective, there were 954 rigs drilling for oil and gas in the U.S. at this point in 2019. That said, solid oil prices will prevent the rig count from falling too far and could spark a rebound later this year. West Texas Intermediate benchmark prices currently sit around $75 per barrel, enough for most drillers to turn a profit.

The U.S. is still on track to set a new annual oil production record in 2023. One forecast: 12.4 million barrels per day, just above 2019’s 12.3 million bpd.

This forecast first appeared in The Kiplinger Letter, which has been running since 1923 and is a collection of concise weekly forecasts on business and economic trends, as well as what to expect from Washington, to help you understand what’s coming up to make the most of your investments and your money. Subscribe to The Kiplinger Letter.

Housiaux covers the White House and state and local government for The Kiplinger Letter. Before joining Kiplinger in June 2016, he lived in Sioux Falls, SD, where he was the forum editor of Augustana University's student newspaper, the Mirror. He also contributed stories to the Borgen Project, a Seattle-based nonprofit focused on raising awareness of global poverty. He earned a B.A. in history and journalism from Augustana University.