The entire world is entering an era unknown in our lifetimes, and the economic and social disruptions that will occur over the coming year will be painful, and lasting. Demand for energy is falling, coinciding with the precipitous drop in economic activity, and oil and gas prices have been devastated by oversupply and soft demand in a now global market for these vital commodities.
Then, enter our “ally” Saudi Arabia and our nemesis Russia who together are flooding the market with oil to drive the price even lower, a direct assault on America’s oil and gas industry, and America. In short, a pandemic-ravaged world in economic freewill, flooded by strategic competitors trying to kill America’s energy industries with cheap oil, creates challenges many of us have never seen before.
What should we expect? Challenges, of course as our nation’s drillers position themselves for survival by cutting capital expenditures and jobs, while reducing production. But our hope is that America learns an important lesson through this experience
The supply chain disruptions America is experiencing in China as we respond to the COVID19 pandemic should be an example to everyone, a lesson taught throughout history, and one each generation fails to remember. We cannot allow our essential resources and our sustenance to rely on foreign providers. Today, our doctors cannot get the surgical masks, ventilators, medical supplies, and chemicals they need because of a breakdown in Chinese supply chains. We can’t let tomorrow’s crisis be caused by American dependence on hostile providers or broken supply chains.
International trade creates great economic opportunities, but America must have the ability to provide for its own needs. We must be capable of defending ourselves, feeding ourselves, and powering ourselves. America’s oil and gas producers make that energy independence possible.
We cannot allow our nation’s medical response be dependent on foreign suppliers. We cannot allow our nation’s sustenance be dependent on foreign suppliers. We cannot allow out nation’s energy supplies to be dependent on foreign suppliers, particularly those who harbor hostility to the United States. It’s time to recognize the value and importance of US energy production.
America’s drillers are a resilient group of enterprising and innovative businessmen and women. They have yet to see a challenge they can’t conquer, but it’s essential that we remember the strategic value of these important businesses during the year ahead. Our governments are learning the vulnerabilities of our healthcare supply system. Let’s pray we are never forced to learn the weaknesses of a foreign energy supply. It’s essential that governments act to ensure our security.
Never bet against America, and never bet against America’s energy industry. We’re in for a long and difficult road ahead, but America never gives up. We’re down, but not out. This is round one.