Just when you thought things couldn’t get worse for U.S. job losses and the economy, oil prices hit a record low. This is a near-death blow for the men and women who get your oil to America’s refineries.

As I young boy and teenager, I spent a lot of time with my dad in the oil fields in the U.S. and offshore. Drillers, rough necks, pipe racks, pumpers, tool pushers, and gauges taught me a lot about American crude, refineries, and our gas stations. I learned about tank batteries, boilers, and steam injection of wells.

It was fascinating to see how oil became gas, diesel fuel, kerosene, jet and rocket fuels, and even bunker fuel for container and cargo ships. The men who worked this industry had names like Woody, Squint, Guthrie, Patron, and Texas. They were tough guys. They are all passed now, but many stepped up to fill their shoes in jobs in the industry that fuels the American economy.

While we should see gas prices continue to free fall, these prices are not good for an entire industry that creates so many direct and indirect jobs. First, it really makes no sense for our oil companies to produce crude oil when the price per barrel of oil falls below $25 per barrel. That means more lay offs, furloughs, and an end for exploration of new fields.

Next, in the past two years we saw the U. S. exporting crude oil and refined products. This changed the equation from being an importer of oil from the Middle East. Mexico and Canada also ship oil into the U.S. Their oil industry is also a mess. Why are prices falling?   The Saudi’s and the Russians are dumping cheap oil on the world markets. Simple as that!

While oil was cheap President Trump recharged and replenished our strategic oil reserves. That was a solid move and ensures we have war-fighting capabilities if other international suppliers cut off our imported supply.

Capacity is also a problem. We are out of space for the storage of crude oil. California, Texas, Oklahoma, and Pennsylvania tank batteries are all full. Oil tankers can’t offload product when we have no place to store it.

Covid-19 is destroying kills Americans.  This Chinese-hatched virus is destroying our economy. Health officials projections for domestic infection and death were way too high. Some want us to continue the shut down and ask us to be locked down at our homes. You have to agree that distancing and isolation is working. Others say open up and get American and Americans back to work. Compromise is the order of the day. Governors intimately control our abilities to recover.

Each week we are shut down, with only “essential” businesses open,  we are adding to the difficulty of restoring our economy. Let’s get back to work, open up our economy, and do it safely. Life as we know it has changed, if not forever, for a long time to come.

Image Sources

  • Oil: Pixaby