Several industries have declined since the pandemic began. The oil and gas industry is just one of those unfortunate fields. If we take in what’s happening in the US, with over 107,000 jobs in the oil and gas field lost to the pandemic, we can see that COVID-19 has really taken its toll on both the professionals and the industry in general.
As these professions continue to adjust to the new normal, it does beg the question: Is there hope for the oil and gas field during and post-pandemic? We look at the arguments of both sides.
Arguments for industry decline
The general public may not know, but the oil and gas field had already been experiencing losses and decline prior to the pandemic, as per Renee Cho’s article “How the pandemic is harming the oil and gas industry”. Demand isn’t as huge compared to before, leading to overproduction of oil and gas and having to drop their prices as a result. Though business was booming back then, the lack of demand today has caused companies to lose money. This is in part due to borrowing funds at the peak of the industry, which then caused the overproduction problem the field has now. Not to mention that with the rising potential of safer, environment-friendly energy sources, oil may not be the top source it once was.
With COVID-19 putting things to a screeching halt, it affected the industry even more. Because there’s not a lot of vehicles going out to travel, there isn’t much demand for these sources of energy. It has gotten quite concerning that even “Big Oil” companies have been experiencing losses during the lockdown period. These patterns all point to a continuing decline even after COVID-19 subsides.
Arguments for demand increase
In the same article by Cho, however, she does pose the argument that the opposite can occur. Cho cites Marianne Kah of the Columbia University’s Center on Global Energy Policy, who said that certain instances during the pandemic may actually increase oil consumption. Among them had to do with transportation. Though less people will be going out, those who do out of work and necessities may avoid public transportation for their own safety, thus, using their fuel-powered cars as a result.
Another note to consider is that most people would prefer driving to their hometowns and provinces so that they can be with their loved ones during quarantine. Let’s not forget that with social distancing in place, food and parcel deliveries will be quite common, which means oil is a must for these operations to continue.
So what happens next?
With factors contributing to both possibilities, there is no clear way to tell whether the oil industry will be dying out because of the pandemic, or will still persist for years to come. Even experts are split when it comes to this issue. And if it does decline, what will be the cause? A new renewable source? Environmental concerns? Continuing decrease of demands? Whatever will or will not kill the industry, it’s important for professionals and even trainees alike to remain vigilant about the changing trends in the industry.