Oil and gas recovering after dark 2020, but it will take time

April 7, 2021

At the onset of 2020, Oklahoma state officials and oil and gas company leaders were cautiously optimistic about the coming year for the industry, according to a March 14, 2021 Tulsa World report. Then the pandemic hit.

But since then, prices have steadily risen to more than $60 per barrel. The recovery, however, has just begun.

“I’ve experienced some bad years, and I’d say each one of the experiences has been precipitated by an outside problem. Certainly, COVID took the place of the outside problem,” said Dewey Bartlett Jr., former mayor of Tulsa, president of Keener Oil and Gas, and head of the Oklahoma Energy Producers Alliance.

“Due to the incredible success the industry had through the drilling of horizontal wells … putting this country in a position to sell oil and natural gas — a position we had not been in in many many decades — when the COVID hit, it couldn’t have been at a worse time. It’s something that has never happened before, and it certainly was never anticipated, and hopefully, it will never happen again.”

He said that even though the price of oil has come back up, policies by the new Biden administration — including halting construction of the Keystone XL Pipeline and putting a moratorium on drilling on federal lands and offshore areas — could hamper recovery efforts.

“By simply getting rid of the supply, that does not mean you’re getting rid of demand,” Bartlett said. “You have to buy from somewhere if we want to maintain our lifestyle. Driving cars, driving trucks … and making plastics, clothes … drugs — all of those things come from oil and natural gas in a processed way.”

Bartlett said three things have to happen for the industry to fully recover: “People need to start driving” like they were before the pandemic; the transportation industry, particularly trucking, needs to return to normal; and airline flights will need to approach returning to normal to allow the airline industry to recover.

“All three of those activities are going to have to have very significant improvement,” he said. “It will be a while. We’re now beginning to see the market reflect the optimism that we are seeing a recovery,” Bartlett said.

He said $60 per barrel for oil is “not a price that is going to make everybody extremely happy. But at least it’s at a level where oil and gas companies can operate their wells somewhat profitably.”

According to a U.S. Energy Information Administration report in February, a return to 2019 levels of U.S. energy consumption will take years.

What this means to you
Former Tulsa mayor Dewey Bartlett and president of Keener Oil said three things have to happen for the industry to fully recover: “People need to start driving” like they were before the pandemic; the transportation industry, particularly trucking, needs to return to normal; and airline flights will need to approach returning to normal to allow the airline industry to recover. According to a U.S. Energy Information Administration report in February, a return to 2019 levels of U.S. energy consumption will take years.

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