AMARILLO, Texas (KFDA) - President of Panhandle Producers and Royalty Owners Association Judy Stark says the oil and gas industry was already seeing a negative impact economically prior to the start of COVID-19, and the pandemic has made this impact more severe.
“The oil and gas war between Russia and Saudi Arabia, which knocked prices down to start with, but then the COVID pandemic made it even worse. Initially, there was no where to go with the products, and we’ve had a backup of oil and surplus and no where to go with it,” said Stark.
The lack of travelers by air and land significantly lowers the demand for oil, which makes the price of gas decrease for consumers, but has a negative economic impact on the industry.
“It got even worse, because no one was using the gasoline, and certainly no jet fuel was being used for traveling. There was no traveling, there was no car traffic, and so there was no where to go, and prices just plummeted,” said Stark.
Local Economist Karr Ingham says tens of thousands of jobs will be lost, and some oil and gas businesses will close down due to the pandemic.
“The economic impact is severe, because it means, companies who were employing people no longer have the cash flow and revenue to support those jobs. It means, that oil and gas companies will no longer be drilling for crude oil and natural gas, because there’s no market for any additional production certainty.” said Ingham.
He says recovery depends on the reopening of the economy and the demand for oil going back up. He isn’t quite sure when that will be, but he’s hopeful for a turn around in the fall and leading into 2021.
“It kind of depends on how this plays out. Mostly what it has to do with is the timing and the manner and the speed at which the economy can be reopened, which means a return in the demand for energy. Something approaching like what we’ve had before.” said Ingham.