With So Few People Driving Or Flying, Colorado’s Oil And Gas Industry Suffers
Job losses in Colorado’s energy sector are piling up, and the carnage isn’t likely to stop anytime soon.
According to public records, the state has lost roughly 650 jobs in the energy sector in 2020. That’s just a snapshot of the actual losses, according to Bernadette Johnson, an analyst at Enverus. Not every cut triggers mandatory disclosure, she said.
“It’s a decent sample, but it’s not everything,” Johnson said of the data released by the government.
Energy prices have collapsed due to price wars between Russia and Saudi Arabia, and a drop in demand from the COVID-19 pandemic. The value of a barrel of oil plunged 50 percent this year. That’s decimating the energy sector worldwide.
The effects of the pandemic are widespread. Travel restrictions have led to an unprecedented drop in energy consumption, with many fewer people driving or flying.
“When you have folks that are sheltering in place or quarantined, they’re not using as much energy,” Johnson said. “When was the last time we have left our home to fill up our tanks? Weeks.”
As of January, Colorado ranked fifth in the country for crude oil production, and sixth for natural gas, according to the U.S. Energy Information Administration. Hydraulic fracking had dramatically increased output in the state’s energy sector over the past decade. That’s come to a virtual standstill. The number of active rigs in the state has fallen to six, according to Enverus. That compares with 24 in March, and 34 two years ago.
It’s difficult to pinpoint how deep job losses stemming from the crash in oil prices will go. The pain will ripple out well beyond workers at production facilities, according to Johnson. Weld County, the heart of Colorado’s energy business, is at the epicenter of the crisis.
“If you’re in Weld County and you are an electrician or a welder or even a plumber, a lot of that work is supporting energy,” Johnson said.
Johnson says employment in the energy sector is likely on a downward trajectory for the rest of 2020. Halliburton, Liberty Oilfield Services and Basic Energy Services have all cut jobs in Colorado in the past month, government data show.