TX Issues 69% Fewer Oil/Gas Drilling Permits In June 2020 YOY; 15% Of Oil Execs Doubt 2020 Comeback

The biggest oil-producing state in the country issued less than a third as many oil and gas drilling permits last month as it did in June 2019, another sign of the COVID-19 pandemic's impacts on the energy industry. The Railroad Commission of Texas — which regulates oil producers — approved 312 new drilling permits for oil and gas wells across the state last month, compared with 1,001 in June 2019, the state agency said Monday.

Lockdowns and stay-at-home orders in many states have reduced oil consumption, causing permitting to slow down, said Railroad Commission spokesman Andrew Keese. "There's been a drop in drilling permits as business and travel slowdowns during the COVID-19 pandemic took hold along with the oil price drop that occurred due to increased oil supply," Keese said in an email.

In January, the commission gave out 1,133 drilling permits compared with 1,199 the previous January. By March, the number of permits was down to 744 compared with 1,137 the year before. In May, just 251 permits were awarded, less than a quarter of the prior year's levels.

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Some analysts doubt whether global oil demand and production will ever fully recover from the pandemic. One in 6 oil executives said they do not expect oil drilling to return to pre-pandemic levels this year, a survey from the Federal Reserve Bank of Dallas found last month (Energywire, June 25).

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https://www.eenews.net/energywire/2020/07/09/stories/1063530531