2020 was dominated by immense impacts from the pandemic, but the statistics bring a comforting sense of déjà vu for Wyoming’s oil and gas industry.
The Wyoming State Geological Survey released their “snapshot” of the extractive industry in their annual publication: Oil & Natural Gas Resources in Wyoming. The January 2021 summary report analyzes the overall impacts on the industry in Wyoming during the calendar year of 2020.
Wyoming’s oil and gas industry wasn’t that good in 2020 but isn’t as bad as some may have feared. Dr. Erin Campbell – State Geologist and WSGS Director – says “Last year was an unprecedented year, yet there are notable similarities with past boom and bust cycles.”
Wyoming’s oil industry was poised to break records in 2020, as it has in several years past. But once the initial COVID-19 impacts rolled in, it ended a record rather than creating one.
Oil drilling in Wyoming came to a complete halt for the first time since 1884 – ending a streak of 136 years.
Prices followed production with an “acute slump” in global oil. Markets were flooded with a massive supply that wasn’t meeting consumer demand, especially after the national and global lockdowns were enacted.
Natural gas, however, continued a downward trend that was predicted long before the pandemic. After coal bed methane production reached its peak in 2009, Wyoming’s production of natural gas has consistently declined, mirroring the more-troubling decline in coal production around the same point.
2020 may have accelerated the decline, but it’s certainly not responsible for it.
Unlike the declines in oil, Wyoming’s natural gas decline is persistent and unlikely to recover even as the market improves.
For now, Wyoming’s industry is in a “holding pattern,” along with the rest of the world. Oil production is still low – only four rigs were operating in December 2020 as opposed to 30 in 2019 – but prices are holding at break-even.
As for the future, the collapse of 2020 isn’t too different from previous slumps in the extractive industry regularly seen and documented in the last 136 years. Wyoming remains in the oil boom which began in 2009 but production is unlikely to return to the peaks seen in the first half of the 20th Century.
Based on this history and 2020’s statistics, the Wyoming State Geological Survey concludes that “Wyoming’s oil and gas industry is well-positioned to rebound” and “is in a position to remain a major player on the national oil and gas stage for years to come.”
