Oil Industry Faces Economic and Regulatory Woes
Obama hopes the low price of oil will destroy the fracking industry.
Barack Obama is hoping that the low price for a barrel of oil will destroy the fracking industry, opening the way for a green-energy future. The oil industry has been losing jobs for months due to the low prices and a market awash with cheap oil. The industry is beginning to think it won’t be able to call the workers back and get the wells pumping again as fast as they anticipated. Workers are looking for employment in other industries. Shuttered equipment would take weeks to get online. Furthermore, the oil industry is wary of a false rise in the price of oil, so it may wait until the prices become very favorable before they move. Director of North Dakota’s Department of Mineral Resources, Lynn Helms, told reporters last week, “If you’ve been on a strict diet for a long period of time, it takes a while to put the weight back on.” This unwillingness to take business risk could cause the American oil industry to lose its chance of becoming a global leader, become the swing producer in the oil economy that used to be dominated by OPEC.
But the question of whether or not an industry that virtually every American comes in contact with every day does well after this economic dip isn’t on the mind of Obama. His administration backpedaled on a plan to issue permits for oil and gas companies to extract the estimated 3.3 billion barrels of oil and 31.3 trillion cubic feet of national gas that lies under the seabed off the southeast United States. Obama is trying to build a legacy where he is known for starting America on a path to green energy and heavy regulation. Yet despite the swings in the oil and gas industry, it continues to hold its own against all the technologies the green architects desire.