HOUSTON - As oil prices remain stubbornly low, the U.S. Secretary of Energy came to Houston to talk to independent oil producers about their business challenges. Secretary Dan Brouillette says came away from the meeting cautiously optimistic.
Behind closed doors, the secretary and business leaders talked about their strategy to survive crude oil prices that are not high enough for many of them to pay the bills and keep people employed. The pandemic has put a dent in demand and international squabbling has led to too much production, leaving a glut of crude in the marketplace.
As the industry goes, so goes Houston and Texas, with its reliance on the energy industry. The secretary offers a frank assessment of the boom and bust nature of the business.
"When you look across the companies, there are going to be some that are not going to survive this downturn," says Secretary Brouillette, "That's the way a free market works. But, when you look, by and large, this is a very strong industry."
The stronger players may not have long to wait. Brouillette points to indications that energy demand is, slowly, picking up and, perhaps, signaling a rebounding economy. Provided the pandemic can be contained, Secretary Brouillette thinks significant improvement could come by the end of the year, or early 2021, and offer an opportunity for producers who are ready to pull oil from the ground.
"They can get in and out of the market in ways they couldn't four decades ago, very, very efficiently. When the demand comes back, production's going to go right back up to meet that consumer demand," says the Secretary.
Beyond the free-market deciding what a barrel of oil is worth, there's not much the government can do to affect prices, during the downturn. But, producers do say they'd like some help with reducing some 'red tape' and help streamline operations. Secretary Brouillette says that's a conversation he can take back to Washington.