Keeping it Together
Preserving the Permian Basin Energy Sector and the Odessa Economy through the COVID‑19 and Related Oil Market Challenges
Published on May 15, 2020
The Permian Basin is among the most important oil-producing regions in the world. Drilling and production and the necessary supporting industries generate business activity not only in the region, but across the state and the nation. In order to be in a position to fully take advantage of future opportunities, it is imperative that the underlying capabilities remain in place - the workforce, the infrastructure, the supply chain, the equipment, and the community support systems. Given the current situation, maintaining this viability requires immediate action from governments at all levels and the private sector.
The Perryman Group estimates that under normal market conditions such as those prevailing in 2019, the total economic benefits to Texas associated with oil and gas activity in the Permian Basin are estimated to include over $163.8 billion in gross product each year and almost 1.4 million jobs. These amounts represent about 10% of the Texas economy. For the US, oil and gas activity in the Permian Basin leads to economic benefits of an estimated $187.2 billion in gross product each year and more than 1.5 million jobs.
Drastic, but necessary, measures to "flatten the curve" and prevent a major spike in COVID-19 infections have involved shutting down much of the economy. The inevitable result has been the loss of millions of jobs and a sudden and unprecedented downturn throughout the country and, indeed, the entire world. The Perryman Group's most recent projections incorporate the potential effects of COVID-19.
Supporting the structure of the energy sector in the Permian Basin through the current challenges can help ensure that it is in place and ready to resume production growth once the COVID-19 and oil market oversupply conditions are moderated. An aggressive and focused response is imperative to both maintain the infrastructure of the local sector and secure the full potential of Odessa and the entire Permian Basin as the epicenter of efforts to meet future global energy needs.
For more details please refer to the full report.
- Tags: coronavirus, COVID-19, energy, oil, Permian Basin