Gov. Mark Gordon launched an economic stimulus program on Wednesday to help the state’s ailing oil and gas industry recover from the economic collapse of energy markets fueled by the COVID-19 pandemic.
The $15 million available to operators will come from federal CARES Act dollars. The program aims to pump resources into well cleanup and finishing uncompleted oil and gas wells.
Uncompleted wells have a well bore drilled, but oil and gas have yet to be extracted. To complete the well, operators engage in hydraulic fracturing, or fracking.
Wyoming operators will be eligible for up to $500,000 in aid.
“These funds will have a direct impact on Wyoming’s employment rate and put people back to work in our oil and gas sector which was impacted by COVID-19,” Gordon said. “It will provide opportunities for employees who lost jobs when drilling ceased. The oil and gas industry is a huge contributor to Wyoming revenues, employment, and its overall economy. These dollars will assist in our state’s economic rebound.”
In March, a global oil price war broke out between Russia and Saudi Arabia, sending prices tumbling. Simultaneously, the COVID-19 pandemic brought the economy to a near standstill, chilling demand for fuel. By April, the glut in supply and drought in demand caused oil prices to go negative. West Texas Intermediate contracts for May sold at negative $40 per barrel, plummeting roughly 300% a day before the deadline to purchase them. In June, Wyoming’s oil and gas rig count sank to zero for the first time in over 136 years. The series of events this year have devastated the U.S. oil and gas business.
Measures taken to stem the tide of COVID-19 infections slashed petroleum consumption to the lowest levels the U.S. Energy Information Administration has recorded since it began collecting this data in the early 1990s.
“The Energy Rebound Program is an excellent use of the CARES Act funding,” Rep. Steve Harshman, R-Casper, said in a statement. “CARES funding was designed to address many of the disastrous economic effects stemming from the COVID and the collapse of much of Wyoming’s economy. The program will provide immediate jobs and long-term revenue for Wyoming.”
The Petroleum Association of Wyoming also praised the economic stimulus program.
“The Energy Rebound Program is very welcome news to our members and the industry as a whole,” Pete Obermueller, president of the association, said in a statement. “This program means immediate jobs in Wyoming’s natural gas and oil industry during this challenging time. Governor Gordon and his staff should be applauded for their strategic approach. Rather than a simple payment, the Governor has ensured that every dollar spent in this program will create jobs, leverage revenue returns to the state, accelerate important reclamation activities, or all of the above.”
Clarification: This story has been updated to provide additional information on uncompleted wells. Uncompleted wells have a well bore drilled, but oil and gas have yet to be extracted. To complete the well, operators engage in hydraulic fracturing, or fracking.
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