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Earlier this year, the oil and gas industry outlook took a turn for the worse. The industry was faced with a global supply glut of its own creation, billions of dollars in debt racked up over decades, and sudden loss of demand due to the COVID-19 crisis. Now, as the industry continues to flail, it is consolidating to try and cut costs. In just the past month there have been multiple announcements of mergers and acquisitions among some of the largest oil companies.
Over the course of this year, companies have cut back on drilling, laid off workers, and written off assets. Michael Lynch, president of Strategic Energy and Economic Research, summarized the state of the industry, saying, “There’s a lot more red ink than there is black gold. Companies are trying to hunker down and weather the storm. Most people don’t think the oil price will recover for a couple of years.”
The accelerating industry consolidation has been partially driven by the immense amount of debt taken on by the industry in order to stay afloat in the past. More than 50 North American oil and gas companies with debts totaling over $50 billion have sought bankruptcy protection this year.
Some analysts believe that oil demand may have peaked in 2019 and could continue to slide in the future as climate concerns rise and electric car popularity skyrockets. Although most American companies are sticking to oil and gas, many European companies are already pivoting toward renewable investments.
As the situation for oil and gas companies becomes more dire, some producers may not have the money required to clean up after themselves, creating health and safety concerns among local communities. In most cases, the bonds posted by companies prior to drilling are insufficient to cover clean up costs, demonstrating the need for a system overhaul.
Video: It's time to ban uranium mining around the Grand Canyon
A new whiteboard video released today by the Center for Western Priorities and the Grand Canyon Trust, in partnership with the Havasupai Community, explains the risks of mining uranium in the Grand Canyon region.
The animated video highlights the risks of water contamination, particularly for the Havasupai Tribe. The tribe’s blue-green waterfalls at the bottom of Havasu Canyon are fed by a spring that flows from the same deep groundwater that feeds many seeps and springs inside the Grand Canyon. The Havasupai Tribe has led efforts to protect their ancestral homelands in and around the Grand Canyon from mining for decades, and the video urges Congress to permanently ban new uranium mines on public lands in the region.
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We'll go to court to make sure Pendley's illegal decisions end up in the dumpster where they belong."
