For the first time ever, West Texas Intermediate oil futures traded in the negative. Louisiana Oil and Gas Association President Gifford Briggs says the economic impact on oil is not surprising.
“We’ve gotta get the economy rolling again so that demand for oil will begin to start picking back up. It’s not going to be flip a light switch and it happens,” said Briggs.
Briggs says the industry is facing a crisis, with many Louisiana wells planning to shut in 100% of their production due to storage constraints as companies are being told they can’t take delivery in May.
“Once you can’t sell your oil, the next option you have is to fill up the tanks on your property and the only thing you can do after that is shut it all in and that is going to have to be, unfortunately, a step that many producers in Louisiana have to take,” said Briggs.
Briggs believes the biggest element to stabilizing the industry is to get the economy rolling again and says there are relief efforts such as broad-scale royalty relief in the Gulf of Mexico.
“We need to look at severance tax relief here in Louisiana. We need to bring an end to these government-sponsored lawsuits where companies are paying thousands of dollars a month defending lawsuits that aren’t going anywhere, instead of making payroll,” said Briggs.
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