Oil and Gas | KUNC

Oil and Gas

Matt Bloom / KUNC

A Denver district judge has dismissed a lawsuit by Weld County challenging new state regulations designed to cut oil and gas industry emissions.

Matt Bloom / KUNC News

The price of oil has been hovering at $40 a barrel for several weeks now. It’s much higher than it was earlier this year, when prices briefly went negative for the first time ever. But it’s still not profitable for most Colorado drillers.

Oil prices are low, and likely to stay that way for a while. And while low prices can be brutal for oil producers, they're also an opportunity: When the going gets tough, Big Oil often gets even bigger.

But will the pandemic-induced price collapse lead to dramatic deal-making and companies scaling up? Some analysts aren't holding their breath.

"I do believe that the golden age of the mega deals in oil and gas may be gone," says Muqsit Ashraf, who leads the energy practice for the consulting firm Accenture.

As the coronavirus pandemic hammers oil prices, the number of "orphaned" or abandoned oil wells could grow. A group wants to enlist newly unemployed oilfield workers in addressing the problem.

 


Courtesy Mark Cleveland

When Mark Cleveland took a job as an electrician for a Denver-based fracking company four years ago, he did it for the money. E-techs, as they're known, can make upwards of $70,000 a year.

"It's hard to find a job where you can have a single income and pay your bills and not worry about living check-to-check," he said. "It wasn't what I expected to be doing by any means, but it worked out."

But in early April, Cleveland got laid off. The cuts were "in response to current market conditions," his company, Liberty Oilfield Services, said in a notice issued that day.

A federal report out this week shows that the Bureau of Land Management has more than halved the time spent reviewing oil and gas drilling permits, a reflection of how the agency's priorities have shifted under the Trump administration.

On Monday, domestic oil prices dropped more than 200 percent, settling at -$14.05 by day's end; the West Texas Intermediate (WTI) crude oil price benchmark momentarily hit -$40.32. This marks the first time oil prices have ever dropped into the negatives.

There’s been too much oil on the market since well before the coronavirus outbreak. But a recent agreement to cut production won’t be enough to prevent states in the Mountain West from taking a big hit.

 


Saudi Arabia and Russia reached an agreement with other oil-producing nations on Sunday to cut output by 9.7 million barrels per day for the next two months, in an effort to stem a plunge in oil prices brought on by the coronavirus pandemic and feuding between Moscow and Riyadh.

OPEC+, a group that includes OPEC members as well as allied non-members like Russia and Mexico, finalized the deal on Sunday after days of marathon negotiations.

Matt Bloom / KUNC News

José Casillas knew something was wrong based on the number of burritos he was selling. As manager of Mi Gallo Giro, a small Mexican restaurant in Evans, he typically filled five big orders a week for oil and gas companies’ safety meetings, making 50 to 100 burritos for each one.

But last week, two of his regular customers called to cancel their orders. Another cut their request in half.

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