As the oil and gas industry in Texas continues to suffer during the global pandemic, and after BP announced global layoffs, Congress may step in.
Senator John Cornyn, R-Texas, said lawmakers are currently looking at ways to provide relief to oil and gas companies, which employ more than 400,000 Texans according to the Texas Oil and Gas Association.
“The oil and gas sector has been really hammered by the coronavirus,” Cornyn said. “Yes, we are looking at some measures that we can provide some temporary relief for those companies where it’s really a matter of survival. Some of them are just going to go away because it’s not economical. We are looking for some things to help.”
Earlier this week, BP announced it was going to lay off around 10,000 employees worldwide. The company is one of the biggest employers in the state, with more than 21,000 jobs in Texas.
This would continue the downward trend of job availability in oil and gas in the state kicked off by the COVID-19 pandemic. The Houston Chronicle first reported the industry cut a record-26,300 jobs in April.
Volume 90% As businesses shuttered at the beginning of the spread of COVID-19, oil prices crashed.
As businesses shuttered at the beginning of the pandemic, oil prices crashed – even reaching negative prices – as Saudi Arabia and Russia flooded the market with oil supply.
“Tragically, this is part of the price of the COVID-19 virus and the geopolitical shenanigans I mentioned a moment ago. We now got Russia and Saudi Arabia agreeing to cuts, rather than flooding the market. A lot of this has to do with reduced demand and surplus supply,” Cornyn said.
The senior senator out of Texas is referring to the April deal made among leading oil countries – though, not including the U.S. – to reduced production of oil by almost 10 million barrels per day, which has brought prices back up.
Cornyn would not specify which measures Congress was looking at to stabilize the oil and gas sector, but noted the gradual reopening of businesses would help in their recovery.
“Because of the shutdowns, the economies around the world are not hitting on all cylinders. My hope is as we slowly begin to safely reopen, we’ll see some improved prices for the industry because – as you know – they hire hundreds of thousands of people in Texas alone,” Cornyn said. “The best thing that could happen for the long term is going to be reopening the economy again.”