Posted on 01/19/2016 3:09:58 AM PST by thackney
...By turnover and investment, petroleum exploration, production, refining, transportation and marketing is one of the largest industries in the United States and around the world.
In the United States, businesses engaged in oil and gas extraction and refining spent almost $200 billion on new equipment and structures in 2013, the most recent year for which data are available.
Oil and gas extraction and refining accounted for more than 14 percent of all new capital expenditures in the United States in 2013, according to the U.S. Census Bureau.
Oil and gas drilling and associated services on their own accounted for more than 13 percent of whole-economy capital expenditures...
The oil and gas drilling boom drove an enormous amount of extra expenditure and provided a significant boost to the entire economy....
Unsurprisingly, the collapse in investment spending has produced a measurable slowdown in the broader economy.
The downturn is evident in everything from data on industrial production to freight movements by road and rail....
The impact is not confined to the United States. Oil and gas projects around the world worth $380 billion have been postponed or canceled since 2014 according to Wood Mackenzie, an energy consultancy.
Several hundred thousand jobs have been lost at exploration and production companies and oil field services firms.
But these are only the direct spending cuts and job losses. The downturn in oil and gas is rippling all along the supply chain.
The oil and gas industry is not just a major producer of inputs used by other manufacturers, service suppliers and households, it is also a major consumer of raw materials, manufactured items and services itself.
(Excerpt) Read more at reuters.com ...
You are correct
regarding the jobs, back in ‘12 I visited Monahans Texas, the state park there. It is on I 20 west of Odessa. I met a guy in the campground that was a pipefitter from Missouri. He came there to work in the Permian Basin field that was exploding with work. He was calling all his buddies telling them to come. He was offered all the hours he could stand. He came from the fields in Pennsylvania where the work was being interrupted by the antifracking crowd.
He told me of the work going on along the Texas 18 corridor up toward Kermit. We stayed three days exploring the area and seeing all the work in process. In the small towns there were lots of signs for Help wanted. The guy in question was in the State Park because he couldn’t find a site for his trailer in the RV parks in the towns. They were all overflowing. He was a construction nomad, following the work from job to job while mama and the kids were back in Missouri.
Any way, to shorten the story, all the businesses were working at capacity and needed all kinds of help. Cooks, wait staff, payroll clerks, and on and on. The back roads in the actual oil fields were swarming with white pick up trucks. I had no idea where they were going or what they were doing but what ever, they were hard at it
So, when the glut was over, the in hires were let go and these sleepy, dusty small Texas towns returned to their pre glut state.
That is incorrect.
We used to, but do we still?
We’ve been doing that for years. We import crude, refine it and export it.
“Natural Gas liquids, not the natural gas (methane). Ethylene and propylene are made from ethane.”
Must be why PEX piping smells like anti-freeze.
I agree - long term low prices have to be helpful for energy.
Too many have banked on soaring prices and over invested themselves so they suffer for now and we all feel the throes of it, but if they allow it to iron itself out, we will be better off if they don't artificially inflate the prices (like they did to the Markets/Banks with all the QE crap that still waits in the wings to slam us)..
You left out Obamacare.
How is that boom to the economy working out for you now? Oh, 1% GDP growth no so good? Dang, would never have figured it out would you that the oil industry almost single handed has kept the US economy going. When it went down the drain the economy did too.
People do no seem to realize all the millions of jobs in a myriad of industries that the oil industry keeps going. If you would read any the Federal Reserve just said two weeks ago that they had underestimated the value the oil industry contributed to the economy.
Psssst, the fed also said they found out that the money saved by cheap oil is not being spent on other wing dings like everybody has pretended for years.
At least I will know that the coming recession (serious one at that too, not like the last one) can not be blamed of oil companies.
I’ve read in the past that the US does not export as much as it could because of our laws. It is illegal to export gasoline, due to laws passed during our largely self-inflicted energy crisis of the 1970s.
I’ve heard people say that we should keep our oil to ourselves. Why? Should we produce X barrels for ourselves, 2X barrels for ourselves and Europe, or 3X barrels for ourselves, Europe, and the rest of the World? Do we want Y domestic jobs, 2Y domestic jobs, or 3Y domestic jobs? Z tax revenues, 2Z revenues, or 3Z revenues?
Due to a loophole in the laws, we are exporting liquid natural gas (LNG). Last I heard, only a couple ports had PERMISSION to export LNG, and applications for other ports were progressing slowly under Obama.
The upshot is that our Government is harming the petroleum industry and America in general.
BAYTOWN, Texas — Chevron Phillips Chemical Co. broke ground on the first component of a $6 billion expansion Wednesday that executives say could be transformative for the company.
April 2014.
http://fuelfix.com/blog/2014/04/02/chevron-phillips-chemical-breaks-ground-on-ethane-cracker/
I’m pretty sure the hated omnibus bill recently passed ended the restrictions on export of oil and gasoline. Steve Forbes listed that as one of the three good gems in the bill.
It is ILLEGAL for US companies to export oil:
http://www.cfr.org/oil/case-allowing-us-crude-oil-exports/p31005
It was illegal to export most crude oil. That ban was removed.
Refined Products or Natural Gas was never banned from export.
LNG export is limited because it takes years and billions of dollars to build an export terminal.
i left out a whole lot of things...but, i think we basically agree.
Quote from article:
“Several hundred thousand jobs have been lost at exploration and production companies and oil field services firms”
These jobs are never ‘lost’ but will return, as they always have.
I do not like reading scare mongers in the news.
Thanks for the info.
One wonders how many years, dollars, and jobs were lost because those laws existed.
Yes. Are these people bemoaning how the low price of petroleum is hurting the US economy the same people who scream about Greedy Big Oil Companies that squeeze poor Americans?
I expect that people who don’t have to pay nearly as much at the pump are much more likely to take a weekend trip (stay at a hotel/motel), go out to eat a little more, or buy a doodad or two they’ve seen. Plus, businesses that have to fuel fleets of trucks or ships see benefits, as do those independent truckers and contractors who travel all over the countryside.
Please explain.
Thanks for the info.
I won’t argue with you the extent of investments required for LNG exports.
I read that government permits were required. That is probably defensible in principle. However, from the Obama world-view it makes sense to do anything possible to stymie US fossil fuel production, including holding up permits.
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