(YourBasin) – In a year the was projected to bring exceptional growth was halted by oil prices falling and the COVID-19 outbreak. For the United States, major losses are coming for the remainder of the year.
According to a report from The Perryman Group, the outlook through 2020 for the U.S., the nation’s economy is projected to lose $1.5 trillion in real gross product and 12.3 million jobs compared to pre-virus projections for 2020.
But, just how much does the Permian Basin contribute to that?
The total economic benefits of production activity in the Permian Basin received by the U.S. are estimated to include almost $187.2 billion in gross product and more than 1.5 million jobs each year just in oil production.
In oil production alone the $187.2 billion of the $1.5 trillion lost is about 12.5%.
“The magnitude of those numbers and how devastating it’s going to be how much lower they are next year,” says Kirk Edwards CEO of Latigo Petroleum.
With loss always comes gain but not the levels seen before the collapse.
According to the Perryman Group, rapid recovery is expected for the U.S. with a projected 7.3 million jobs and $973.7 billion growth in 2021. Projections also indicate that employment does not get back to 2019 levels until 2022.
Looking at these indicators in comparison to the Permian Basin, it’s not a surprise that the Basin’s percentage losses are higher.
With roughly 23,200 jobs expected in 2021 in the Basin the U.S. is looking to add 7.3 million jobs.
The Basin also looking to recover $10.8 billion next year. The U.S. $973.7 billion.
After taking measure to slow the spread of COVID-19 the U.S. is working to get back open and as things open demand for oil is slowly going up.
“When the pandemic hit the utilization rate probably went down about 35%. Again, the refiners got a really big reduction. Which, again, cause our oil not to be needed as much because then there’s a big surplus of it. The latest numbers we’re probably down around 30% so it’s probably picked up about 5%,” says Edwards.