Secretary of Energy: COVID-19 brought oil and gas down, but Trump is powering a comeback
The coronavirus pandemic dealt a heavy blow to the oil and gas industry in Texas and around the nation. The sudden decline in demand and collapse in prices, followed by job losses and company bankruptcies, has been unlike anything we have seen in decades, perhaps in the industry’s history.
Since 1901, when oil was struck at Sour Spring Mound, Texas, the industry has seen its share of oil booms and busts. Around 1930, prices plummeted when Woodbine sands production soared. In the 1970s, prices soared and supplies collapsed when OPEC clamped down on global oil exports. After the 1980s bust, a boom came in the following decades as U.S. production ramped up, which led to fears of reaching “peak oil.” Then came hydraulic fracturing and the shale revolution. And on it goes. History proves Texas can weather the storm.
The Texas oil and gas industry is never far from our minds at the U.S. Department of Energy. And it is never far from my mind as secretary of energy, having lived in San Antonio for 13 years and working in the energy arena for most of my career. We at DOE understand how important the industry is to the state, to local communities and to our nation. In Texas alone, the industry provides billions of dollars’ worth of taxes and royalty payments — funding schools, roads and emergency services.
The Lone Star State accounted for 41 percent of America’s crude oil production in 2019, along with 25 percent of natural gas production and 31 percent of oil refining capacity. That means much more than energy — it means jobs, prosperity and opportunity. We know what a source of pride it is for Texas to be America’s standout energy producing state and to play such a critical role in our national security.
These are difficult times, and it’s no secret to Texans: There are some who think oil and gas has little to no place in America’s economic and energy future. They plan to exploit the impact COVID-19 had on the market to bury the industry once and for all, caring little for what that means for quality of life in Texas or for our nation’s energy future.
The Trump administration is not among their number. We are committed to and actively investing in technologies that will benefit Texas’s oil and gas industry, for we know how much it gives back to our nation.
At DOE, we are supporting this recovery through fundamental research and development that will advance our technological progress and support private sector innovation. Today, several important projects are underway that demonstrate our dedication to the oil and gas industry in Texas.
The first is our suite of field projects around the state. Aimed at addressing the key technical and scientific challenges to more efficient production, these basin-specific research projects search for ways to increase the recovery of unconventional oil and gas resources.
Current field lab research in the Midland and Delaware basins includes drilling, hydraulic fracturing and monitoring multiple horizontal wells to optimize well spacing and completion design. Meanwhile, the Eagle Ford Shale Lab is studying stimulated reservoir volume to optimize production from fewer new wells with less material and energy use. More efficient oil and gas recovery means increased production and more competitive prices for consumers.
The oil and gas industry will likewise benefit from DOE’s work on improving capabilities in carbon capture, utilization and storage — CCUS. It will play a key role in the future of our energy economy and the global energy economy. And make no mistake: This research and development race has allowed the United States to lead the world in making energy production cleaner and more efficient and will ensure that we maintain global technological supremacy.
DOE is investing in CCUS projects in Texas and elsewhere to promote economic growth, protect the environment and enhance our energy security. A recent study showed that as America accelerates CCUS deployment here at home, we open opportunities to export our technology and expertise abroad to countries that have the resources to produce energy and their own goals for reducing emissions.
Finally, DOE has advanced a policy proposal to extend liquefied natural gas authorizations through the year 2050. This proposal would provide further regulatory certainty to LNG exporters as they compete in the global market. The proposed extension would also boost investment in energy infrastructure in Texas, spur job creation and advance America’s energy security goals.
Our oil and gas industry may be down, but it is never out of the fight. The president’s plan to unleash innovation-driven American energy dominance will power the post-COVID-19 economic comeback, and we are already seeing signs of better days.
Texas has long fueled our nation with its abundant oil and gas supplies, and with the support of DOE investment, it will continue to do so.