Posted on: 05. 15. 20
By now, the evidence is clear that COVID-19 and the global oil price war have had a significant, negative impact on the United States shale industry. In the past, we’ve discussed how the government could possibly help the oil industry through meticulously planned bailouts. However, there are steps the shale industry can take that can help ensure its long-term survival as a global competitor.
Here’s a look at our shale industry insights going forward and how drill sites and production facilities can work together to bring the industry back up.
Oil Will Survive, But Slowly…
According to an article from Forbes, the falling oil prices can’t last forever. Eventually, they will hit their limit and become forced to move back up. However, the article says that even though our industry should ultimately survive, the process will be slow as long as a vaccine for COVID-19 hasn’t been created and approved.
Even after we’ve returned to “normal,” the oversupply of oil will still remain a problem. Experts predict that it could take up to a year for the current oil supply to get used up when prices begin to increase again.
Lower Oil Prices Provide Tax Relief
As oil companies drill on private property, they must pay taxes and royalties to the owners of the property. These payments are based on the overall value of the oil that’s farmed and generally fluctuates with the market.
Though it’s never comforting for oil prices to dip too low, when they do reach the depths that they have, oil companies do receive tax and royalty relief. In the long-run, this relief can help keep U.S. shale production functioning. While it may not be at the levels we want to see at facilities, it at least shows promise for the future of our industry.
Well Site Automation
Although we are still in the early stages of using artificial intelligence (AI) at drill sites, the idea has become something that many companies are considering based on the overall benefits. Currently, one of the biggest factors that financially holds oil companies back is the expense of equipment training and ensuring that sites are well-staffed by numerous employees that are capable of safely maintaining the site.
AI takes the complexity of adjusting drill direction by automatically following the site’s proposed drill path. This use of AI alone provides several benefits that include:
- Decreasing the strain of equipment
- Drilling wells quickly
- Allowance of remote task oversight
- A cleaner work site
Continuous Best Practices
Best practices have always been one of the biggest priorities of our industry. From proper maintenance of equipment like gas coolers to studying specific reservoirs for the best drilling opportunities, continuing to focus on being the best industry we can be will eventually help us to press forward.
Stay Updated on Shale’s Survival With Pro-Gas, LLC
At Pro-Gas, LLC, we know how resilient our industry is. Despite the current economic climate, we are certain that U.S. shale will make it through as we adjust to this new normal. As always, we are here to provide your site with the best equipment at an affordable price, as well as keep you caught up on the latest industry news. Contact us today to learn more about our services.
Learn more about your trusted oil and gas industry service provider, Pro-Gas, LLC.
