Coronavirus is the talk today on In The Oil Patch Radio Show! We discuss how the Oil & Gas market can be effected by this outbreak.
In The Oil Patch Radio is the top name in Oil & Gas news with Energy experts here to talk shop today with Carr Ingam who is the CEO of the Texas Alliance of Energy Producers, a really great and neat organization that deals with energy producers and of course our very own David Blackman, the editor of Shale Magazine!
There is the crazy buying sprees going on in our grocery stores today with the Corona virus and all of that crazy nonsense so today we ask some of the top names in energy their opinion and view in how this can trickle down to our everyday lives.
Today, our main goal is to effectively represent, the oil and gas industry. It’s operators, the people who were involved in that business of producing, exploring and producing crude oil and natural gas. Bring it to the surface move it into the marketplace where it can benefit, the economy, the consumers, the things that power our economy and make it go. That is the essence of what our people do, and that’s the essence of what the oil and gas business does in the state of Texas and beyond. Our particular mission in terms of doing this, involves, representing the oil and gas business. At the governmental advocacy level. Thank goodness oil and gas remains on industries is largely regulated at the state level.
Is the Coronavirus gonna play itself out and kind of a restart of the global economy?
At least in Texas we know this will have a sizable impact. Typically the comptroller will convene every two years in advance of a Texas legislative session to assist him in compiling the revenue estimate that the legislature will have to work with in fashioning a two year budget. These assumptions moving into the current biennium where the legislative session last year that put a budget into place that still has a considerable ways to go, was largely fashioned in what appeared to be quite conservative at the time something around $50 crude oil.
Well now we’re not going to have that and we may not have it for some period of time. So this certainly does imply some potential adjustment in the way the state operates because tax revenues are going to fall relative to what was expected in relative to the budget that was put into place.
We are nimble enough to beat this Coronavirus, I think one of the reasons why is we’ve got a massive rainy day fund that was a virtually entirely filled up oil and gas severance taxes. The bigger, the bigger issue may be on, as you suggest on state and local governments in Texas, unlike a number of other producing states, are actually taxed at their market value as a property tax.
This is what makes tax available to school district, cities, municipalities, counties and other things, particularly in the producing regions out there. This stands to cause them some pain if this goes on for some length of time. The oil and gas industry is such a sizable part of the state and local economies that a 50% decline in the price of oil in two months if it is sustained for some length of time is pointing to cause economic pain there. There’s no avoiding this Coronavirus or its effects but we can reduce the curve together.
Let us know your thoughts!