Wyoming’s oil and gas industry continues to show signs of recovery from the 2020 pandemic shockwave that drove the price of oil below $0 per barrel, spurred layoffs and stalled production.
At least 18 rotary rigs were active in the state during the second week of October compared to one rig during the same week in 2020, according to Enverus, which tracks rig data on a weekly basis. Wyoming saw a rig count of zero for the first time in its history in June 2020, then again in August 2020.
Most of the drilling activity is targeting oil in the southern Powder River Basin. Ten rotary rigs were active in Converse County during the second week of October and four in Campbell County.
Job numbers
The natural resources and mining sector added 300 jobs from July 2020 to July 2021 to stand at 15,200, according to the Bureau of Labor Statistics and Research & Planning. The unemployment rate for Wyoming’s natural resource and mining sector held at 4.6% in July, a rate that’s generally been steady since July 2020.
“Without question, when you’ve got [natural gas] prices that we haven’t seen in, you know, seven, eight years, it’s absolutely going to spur some interest in the new development in new exploration.”
Paul Ulrich, Jonah Energy
Counties where oil and gas and mining activity are concentrated were among the hardest-hit by unemployment during the 2020 pandemic shutdown. That trend still applies.
Sweetwater and Natrona counties both saw 5.8% unemployment in July — the highest in the state — while Campbell County came in at 5.5%, Sublette County at 5.2% and Converse County at 5.0%, according to Workforce Services.
In addition to direct federal COVID-19 stimulus benefits, oil and gas operators in Wyoming received a total $42 million CARES Act funding stimulus from Gov. Mark Gordon’s Energy Rebound Program.
Outlook
“There’s a sense of cautious optimism,” Paul Ulrich of Jonah Energy said. “We’ve clearly seen activity pick up. We’ve seen much stronger prices than we have in the natural gas world than we have for years and years.”
The price of oil was about $82 per barrel, and the price of natural gas $5.40 per thousand cubic feet, during the second week of October, according to commodity tracker Rigzone.com. If commodity prices hold, Wyoming’s oil and gas industry is expected to continue to make gains — a boon to state revenue, as well as counties that are home to drilling and extraction.
There’s even speculation that some operators might be tempted to revive natural gas drilling projects in south-central and western Wyoming that were in the planning stages in the 2010s but fizzled due to more competitive gas fields elsewhere in the United States. That speculation might also include coal-bed methane gas in the Powder River Basin where thousands of wells have been idle for years.
“Without question, when you’ve got prices that we haven’t seen in, you know, seven, eight years, it’s absolutely going to spur some interest in the new development in new exploration,” Ulrich said.
However, there’s still a lot of uncertainty in the oil and gas industry regarding federal mandates and a review of the federal oil and gas leasing program under the Biden administration. That’s intensified here because there’s a large volume of federal oil and gas in Wyoming compared with other producing states.
Policies surrounding federal oil and gas are “ever-shifting,” so it’s difficult to make bold predictions regarding the industry in Wyoming, Ulrich said.
Despite the economic slowdown caused by the supply chain disruptions, oil is moving up and could continue to do so. Coal is popular in Europe and China and should be here. Let us hope for a real rebound. Policy decisions based on real world circumstances should let us rebuild our energy economy. Wind and solar are just not ready to replace the demand for energy, and hydro is in trouble due to drought.
It’s ironic that the author states an uptick to 18 working rotary rigs in all of Wyoming is considered a demonstrative positive.
Back in 1980 when I was the night bartender at the Cowboy Bar in Meeteetse during the oil boom , and still commuted to Cody regularly , driving across the western Big Horn Basin in the middle of the night you could see nearly 18 rigs working at one time within eyeballing distance on a 35 mile drive. They decorated the badlands like lit up Christmas trees. A couple were barely outside the Cody city limits proper. That was during the last oil boom. Maybe the last true oil/gas boom ever in my province of the state. The demise of crude fossil fuels cannot come soon enough , IMHO
85 vehicles in the Biden motorcade.
How many jets did it take to fly them to Italy? Going to Scotland next. Better sink some more wells, eh?
Same point made in years past…..different singer, same tune. The Biden administration’s lurch to the left and resulting lockdown on issuing APD’s has the obvious effect now as under Obama: commodity supplies tighten……..commodity prices rise…..those producers and operators with producing assets are financially better off. I like a D in office. The oil-gas industry does much better with higher commodity prices. It amasses the capital in the “off” years under a D to later employ under an R. The energy industry can then employ more people thereby stimulating the economy via the multiplier effect. Schools have more funding via the ad valoreum tax. Higher energy prices are the regressive “tax” we all pay – most punitive to fixed income and lower income – but nobody wants to talk about that. I like a D in office, then an R. Works great!
Good to see the hand-wringing about man-camps, animals and the evils of fossil fuels still is front-center at WyoFiles.
Good article, Dustin.
For those denouncing fossil fuels, I’m certain you live naked in a tree or simply do not know the chemical make up of nearly everything you utilize, wear on a daily basis. As far as pollution goes, although always room for improvement, I have seen the industry improve by leaps and bounds in environmental management etc. I have also seen the size of the payments land owners receive for surface disturbance and the revenue collected by county and state agencies. So when your roads are bad due to “oilfield” traffic make sure you are holding those accountable for not using the funds appropriately. There are responsible ways to extract fossil fuels while keeping food on our tables so if the only resolution you can come up with is what your friends and facebooks opinions lead you to believe, please educate yourselves on the negative impacts VS benefits to this country. Lest we forget that if we don’t drill in America, they will in the Middle East so when you pay $4 a gallon you are funding terrorism while taking food from the tables of American families. By the way does anyone know the fossil fuels expended in manufacturing of your electric cars and wind turbines. Or maybe the turbine graveyard in landfills?
Samuel- as one opposed to the wholesale mega-extraction of crude oil and coal fossil fuels, and a lifelong environmentalist, I would still allow for enough drilling and production to produce the 7 percent of crude oil actually used as a petrochemical and not fuel. I fully appreciate the wide range of products that can be made from crude oil, but I must severely deprecate the use of crude for thermal energy and motor fuel. Humanity can get by producing 1/14th the amount of crude oil for petrochemicals. Sorry
Even when oOnly 7 percent of the world’s crude oil is used for anything other than burning for energy , it’s still too much. The world uses about 85 million barrels opf crude per day. Chemically we would only need about 6 million. There are other biomass solutions to work the chemical mojo, sustainably. Makes no sense to burn 350 million year old crude oil as gasoline or diesel in your truck in a few days, re-releasing all that carbon straight back into the sky. All fossil fuels are just carbonized fossil sunlight, so why not use actual sunlight where possible ? For starters.
Those who only see the money argument about fossil fuels have one eye shut and are squinting thru the other eye…
So do you think wind and solar can charge electric cars?
Or perhaps we should just use really big rubber bands or run with bare feet like Fred Flintstone?
Natural gas, oil, and coal are cheap and reliable as long as sane people run the Whitehouse. We saw in Texas what leftist policies do. History matters.
Leftist policies caused the power outage in Texas? Really? LOL…
Deregulation, arrogance, lack of preparedness, and a “Texas only” grid caused the problem.
https://www.nytimes.com/2021/02/21/us/texas-electricity-ercot-blackouts.html
https://www.texasmonthly.com/news-politics/texas-blackout-preventable/
https://apnews.com/article/why-texas-power-grid-failed-2eaa659d2ac29ff87eb9220875f23b34
A little spark of joy in a dying industry, how sweet. I’m sure the same type of thing happened during the ending days of the buggy whip businesses.
We will see what you all think in January when your heating bills come due…….coal demand is up because electricity demand is up, natural gas demand is up due to winter shorten supplies and electric demand. I doubt any of your are willing to give up your car/truck or want to heat your home with a wood stove either. And for those of you with those coal/natural gas energized cars…….well your electric bills will be a bit higher as well.
And before you all jump on the band wagon that I am stuck in the fossil fuel economy, it’s actually the opposite. I’m all for developing alternative sources of energy, but not blindly ignoring the environmental issues with wind towers and solar panels as well as their limitations. Everything has a cost, but we need to invest develop alternative sources of energy in a smart manner acknowledging all of the issues with the energy sources we invest in. Oil, gas, wind, solar, geothermal, conservation all play a part in our energy mix.
Fossil fuels only get anywhere with fossil thinking driving the buggy…
That’s just great. Anything that accelerates the extinction of humans has to be good.
That “boon” to counties where a new oil & gas boom is developing may help a few local businesses & the fast food chains but most of the drilling jobs go to out of state, temporary workers & the revenues to pet projects of county commissioners.
Those of us who live here pay dearly in water (where they will get it & how it is disposed of once used & polluted) degraded roads, lost wildlife (habitat & traffic kills) loss of dark skies & the social disruption of man camps.
This boom will generate some cash for industry, sure, but it has huge costs by stalling our needed transition away from fossil fuels, landing with a heavy impact on the wrong side of that equation.