The Federal Reserve Bank of Dallas has reported that U.S. shale oil and gas executives are increasingly adopting electric rigs and hydraulic fracturing to reduce diesel emissions. However, challenges related to grid infrastructure and costs remain significant barriers, according to their quarterly energy survey.
The survey, which included responses from executives in Texas, Louisiana, and New Mexico, indicated mixed results for third-quarter oil and gas production; while oil production saw an increase, natural gas production declined. Nearly 20% of executives reported fully converting to electric-powered drilling rigs, with another 6% planning to electrify their operations and 31% expecting partial electrification.
The shift toward electrification not only aims to cut emissions but also to reduce the noise and pollution associated with diesel-powered equipment. However, around 29% of respondents cited uncertainty regarding future grid access as a primary challenge, while 25% pointed to infrastructure issues.
Executives also expressed concerns about lengthy permitting processes, which they believe hinder the industry’s transition to electrification. One executive noted that what should take three months for utility grid interconnections can extend to 12 to 18 months.
The survey, conducted from September 11 to 19, included 136 energy firms, with a positive employment index indicating continued hiring, albeit at a slow pace. While costs for exploration and production firms rose, they did so at a slower rate compared to the previous quarter.