The pain isn’t over for the oil and gas industry, according to speakers at the Rocky Mountain Energy Summit, the Colorado Oil & Gas Association’s annual industry conference underway this week.
But when this part of the boom-and-bust cycle is over, the industry will be stronger for the innovations that have occurred while crude oil commodity prices are low, speakers said.
“Down cycles create great opportunities, and we’re going to come out of this smarter and fitter,” said Wouter van Kempen, chairman and CEO of Denver-based DCP Midstream Partners LP (NYSE: DPM), the biggest natural gas processor in the United States.
“The technical innovations that are coming out of this will be tremendous. We are innovators and we’ll find new ways to get product to the markets,” van Kempen said during the opening panel of the COGA-presented summit (website here) at the Colorado Convention Center.
Oil prices in the summer of 2014 hovered around $100 per barrel and this week have dipped below the $40 mark. The drop is due largely to an international glut of oil as U.S. energy companies using the twin techniques of horizontal drilling and hydraulic fracturing sent domestic oil production soaring. Lagging demand, particularly in Europe and developing countries, is also a factor.
The drop in prices has cost thousands of jobs across the industry in the last year. And some companies are not expected to survive.