Oil boom or bust? Future one may be subtle or not at all

Examining Energy Today and Tomorrow

A three-part series

(Editor’s note: The following is a three-part series on the status of energy production in Wyoming, focusing on Converse County’s diversity in that sector. The series considers where we are at currently, and offers some forecasts with a big caveat, who really knows what could influence production, good and bad?) 

Part I

While energy investments in Converse County are holding steady for now, producers say there is great uncertainty regarding oil investments worldwide, due to the ongoing war with Iran and disruption to Middle Eastern supply routes. 

Twenty percent of the world’s oil passes through the Strait of Hormuz and the ongoing conflict may drive oil prices up toward $120 a barrel for crude, according to some oil industry experts, though federal officials are working to soften that impact at the pump.

How that will play out with oil producers in the American West, however, is yet to be seen. Will the higher price spur exploration in the promising oil and gas plays in Converse County? Will the higher price of gasoline drive down demand and slow investment here? Will the changing face of federal regulations, coupled with the potential for upheaval in this year’s election, be positive or negative for production in Wyoming’s latest oil boom that is centering on Converse County?

Meanwhile, the Trump Administration directed the Environmental Protection Agency to ease restrictions on coal – a less-expensive route for Americans to heat with, however, many coal-fired plants would have to be refurbished at costs which may just rival building new ones. Industry and state economists expect coal to continue the decade-long decline in production – so will the administration’s efforts to bolster it do much beyond opening up land for mines at a time when demand is falling?

And, adding new nuclear plants seems to be a hot-button issue to solve the growing energy demands, while solar and wind generation continues to expand with new projects being promoted – though many face detractors in Converse County, elsewhere in Wyoming and across the West vowing to fight them. That tug-of-war played out in landowners favor recently with one massive hydrogen extraction scheme near Glenrock now heading to court to decide state leases for the wind farm portion. 

Regardless, though, across the spectrum Converse County and eastern Wyoming continue to play an important, almost outsized, role in energy production – as it has for decades. What has changed, though, is that energy production has shifted from Campbell County’s dominance in coal to Converse’ hefty role in oil and gas, uranium and wind – not to forget about those proposals for hydrogen extraction, pumped water hydro-generation and other energy plans here.

With all those unknown, where we are today by industry begins with oil.

PRICES Come Down, go up

Converse County continues to lead the way in Wyoming when it comes to oil in our neck of the woods, according to data from industry experts ENVERUS.

As of March 24, Converse County had six standing rigs, followed by Campbell County with three. Sublette County shows two, and Carbon and Johnson counties have one rig each, according to Enverus Intelligence Research (EIR) data. Converse, then, accounts for nearly half of the 13 statewide.

While this continues to be positive economic news locally, the worldwide forecast is looking to see $95-100 per barrel of oil through 2027, according to EIR Director of Research Al Salazar.

ENVERUS’ updated global oil outlook reflects impacts from the U.S. / Israel war on Iran, near zero flows through the Strait of Hormuz, a record G7 (Group of Seven) SPR (Strategic Petroleum Reserves) release, and expectations for a muted U.S. production response, officials said.

Salazar said on March 24 that EIR expects Brent crude to average $95 per barrel for the remainder of 2026 and $100 per barrel in 2027, due to accelerating global stock draws and an unresponsive supply outlook. 

“The world has an oil flow problem that is draining stocks. Whenever that oil flow problem is resolved, the world is left with low stocks. That’s what drives our oil price outlook higher for longer,” Salazar said in a release. “With consolidation and stricter capital discipline reshaping the shale patch, we expect a much more restrained U.S. supply response than in previous $100/bbl environments.”

Basically, that means the expected oil boom may be more muted than previous ones when crude topped $100/bbl, but predictions are based on constantly changing factors. 

Each month of constrained Strait of Hormuz flows changes the EIR outlook by approximately $10-$15/bbl, he said, highlighting the historic significance of the disruption and high uncertainty on duration. 

“Even with West Texas Intermediate (WTI) prices at $90-$100 per barrel, U.S. oil producers are not expected to materially increase output. EIR forecasts liquids output to grow 370,000 barrels per day by exit-2026 and 580,000 barrels per day by exit-2027, reflecting drilling to production lags, industry consolidation and disciplined investment. 

“Global oil demand growth for 2026 has been reduced to approximately 500,000 barrels per day, down from 1 million barrels per day, as higher energy prices and anticipated supply disruptions weigh on global economic activity,” he stated, giving a nod to the impact on demand with higher gasoline and heating oil prices.

According to EIR, cumulative global oil stock draws are estimated at roughly 1 billion barrels through 2027, with non-OECD (Organization of Economic Cooperation & Development) inventories, particularly in Asia, absorbing nearly half of the impact. 

The 60-day Jones Act waiver may improve short-term U.S. shipping flexibility, Salazar explained, but its overall impact on global oil prices is limited, with broader market forces remaining the primary driver.

April 7, oilprice.com posted the following per barrel oil prices: WTI (West Texas Intermediate) Crude, $115.67, WTI Midland, $122.36, Brent Crude, $110.09, OPEC Basket, $110.63, and Murban Crude coming in at $118.64, however, prices were changing rapidly throughout the day and day-to-day – signalling the volatility. 

Converse County Commissioner and oil industry cognoscente Robert Short recently spoke about prices, oil futures trading and the volatility in today’s market. The uncertainty going on in the oil sector is so difficult for oil producers that “it’s going to be difficult for them to do much in the way of investment. Oil futures are sold months in advance. (Note: Short, a Republican from Glenrock currently living in Douglas, has announced he is running for Wyoming Secretary of State.) 

“Say you have producers who sold oil some months ago that they did not produce yet, and they sold it for $60 a barrel or $70-$100 a barrel. And now you see the oil futures market vacillating between $100-plus and diving down, right, just all over the map. Of course it is going to be so difficult for an oil producer to find a reason to do any kind of increased production exploration or infrastructure investment (at this time),” Short explained. 

Indeed, the volatility of oil prices is evident to even the average person, as higher oil prices are seen one day but the next, an announcement that oil prices are crashing. Short offered some insight into how the oil industry – and pricing – works to help explain the wild swings.

“Let’s just say, arbitrarily, it takes 45 to 65 days, plus or minus, to go from no well to getting a well online. In 65 days, where’s the price of oil going to be when the national dialogue is that this ‘excursion,’ as it’s been labeled by the president, is going to be over in three or four weeks . . . it’s going to be incredibly difficult for oil producers to find a rationale that they would pay exorbitant prices to get a rig stood up expediently so that they can get a hole punched in the ground. Right? 

“Because it’s not like you can have an oil well go from no oil well to a producing oil well in a matter of days. It takes some months and they have APDs (Application for Permit to Drill) . . . they have those in hand, but they’re not going to expedite that by paying a premium to bring in a rig that was not scheduled to be in if they don’t feel like the return is there based on the current oil price,” Short said. 

“They can’t sell into the current oil price with that new hole because they don’t know what it’s going to be by the time they’re developing the resource,” Short explained.

What that means for Converse County and the rest of the Rocky Mountain West is a softer boom, or perhaps no boom, than in previous years with a more stable outlook.

NATURAL GAS

While the focus so far has been on oil production, many wells in Converse County are also producing natural gas, and lots of it. The surge in natural gas compressor stations in Converse County – from the huge ones outside Douglas to the smaller ones north of us which feed into the system – is a result of the growth natural gas is having here.

And, according to Short, Americans are going to see an increase in demand for natural gas. That demand will be “associated with, for example, that data center that’s going in, in Cheyenne, that’s under construction.” 

“That is a joint effort which also includes Black Hills Energy, I believe, and they are building a natural gas-fired power plant to provide the power for that data center. That’s a huge thing for them, because one of the big positives is that the natural gas plant is easier to stand up in a lot of regards than a coal-fired power plant . . . it’s much easier to bring a pipeline in than it is to bring a rail line in for that feedstock,” Short pointed out.

And, that means there’s also going to be a greater consumption of natural gas overall. Data centers appear to be looking for new homes across the U.S. – including one proposed along the Natrona/Converse boarder and another in Evanston, according to multiple sources.

“You can bet that the price of natural gas is going to increase, and it’s going to increase for all of us,” Short said. “So heating your home or running your water heater or using your gas cooking appliance, all of that is going to become more expensive no matter what anybody says.

“Even though there’s a rate tariff associated with these large industrial projects, at some point, the gas supplier has to increase their infrastructure in order to supply the amount that will be demanded for these generational facilities. And they have to recoup it somehow. The way to recoup it is to increase the cost of delivered goods. More than likely it will be a slow creep, but I believe it will be a creep nonetheless.”

As of midday March 29 natural gas (Henry Hub futures) is selling for $3.10 to $3.53 per MMBtu, according to Business Insider via www.businessinsider.com

Because oil and natural gas prices also fuel tax revenue flowing into Converse County government – as well as state coffers – the higher prices will continue funneling money into them. Of the two, oil is more prominent, with an assessed valuation here of $2.846 billion in 2025. The valuation for natural gas was $262 million, and industrial valuation (much of it tied directly and indirectly to energy) hitting $353 million.

Those three sectors alone account for more than three-quarters of the county’s staggering $3.82 billion valuation last year. That valuation is just short of the record set in 2023 of $4.38 billion but remains well above the $1.74 billion at the beginning of this decade. (It is important to note that coal, while important for employment here, does not pay any severance taxes in Converse County as the mouths of the mines are in Campbell County.)

GAS PRICES INTENSIFY

As most people already know, gas prices in our communities have gone up over $1 in less than a month and 20 cents in just the past two weeks, though they seemed to be holding more steady, albeit higher, in the last week.

Douglas gas prices were predominately the same across the board April 7 with a low of $3.70/gallon for regular and a high of $4.99 for diesel.

In Glennrock prices varied. Eastgate was $3.55 and Grab N Dash was $3.69 for regular and per gallon. Premium gasoline was $4.25 per gallon at Eastgate and $4.29 a gallon at Grab N Dash (all Douglas and Glenrock prices are from gasbuddy.com and by visual inspection of stations).

Wyoming’s average for a gallon of regular gasoline was $3.82, while the national average for a gallon of regular gasoline is up more than $1 since last month, climbing to above $4, according to AARP Wyoming March 26. 

“The national average could reach $4 a gallon in the coming days for the first time since August 2022,” AAA Mountain West Group spokesperson Julian Paredes said at the end of March, just before it topped $4. “Gasoline demand remains on the rise as spring break season continues, another factor in surging pump prices.”

According to data from the Energy Information Administration (EIA), gasoline demand increased in the last week of March from 8.72 million b/d to 8.92 million. Total domestic gasoline supply decreased from 244 million barrels to 241.4 million. Gasoline production increased, averaging 9.7 million barrels per day.