The State of the Texas and US

Upstream Oil and Gas Economies

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- presented by -

Karr Ingham

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Economist; Petroleum Economist

EVP, Texas Alliance of Energy Producers

 

The upstream, or exploration and production sector of the US domestic oil and gas industry clearly suffered from the effects of COVID-19 and the subsequent local, national, and global economic “lockdown.”  In many respects those effects can now be quantified in terms of declines in product demand, prices for crude oil and natural gas, oil and gas production, the rig count, direct industry employment, and other measures of upstream oil and gas activity.  The sector began a slow and uneven recovery from COVID in the second half of 2020 which continues into 2021, gaining momentum in some respects but questions and hurdles remain about when and if a full recovery to pre-COVID levels can be achieved.

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The answer to that question depends in part on how “full recovery” might be defined.  Is it demand, price, rig count, production, employment, all of the above?  It also depends on some longer-term trends that were becoming increasingly evident in 2019 – and well before that, actually – before COVID arrived as an economic event in 2020.  Production of crude oil and natural gas reached record levels in late 2019 and early 2020 just in advance of COVID.  Even as production levels were rising, other measures of oilfield activity were declining.  The nature of these trends has strong implications to the condition of the industry in 2021 and beyond.  Further influencing these outcomes is the current political landscape in Washington, DC, coupled with the economically ill-advised rush to restrict or eliminate fossil fuel production and usage in the name of decarbonization and climate change.

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Karr Ingham is a professional economist who lives and works in Amarillo, Texas. He is the owner of Ingham Economic Reporting, an economic analysis and research firm that specializes in the indexing and tracking of regional and metro area economies. 

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Mr. Ingham is a native of Stratford, Texas in the northern Texas Panhandle, and a 1979 graduate of Stratford High School. He attended Hardin-Simmons University in Abilene, Texas, and is a Magna Cum Laude BBA Economics graduate of West Texas A&M University in Canyon. He has graduate work in economics, primarily in the area of national macro-economic policy, and monetary theory and policy. He also taught undergraduate micro-economics at West Texas A&M for a short time (they were in a pinch!). 

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Ingham has a career history in agriculture broadcasting, public affairs and politics. He served as District Director and Legislative Aide to then U.S. Congressman Beau Boulter, and was the Congressman’s principal liaison to the Panhandle and West Texas agriculture community. He also performed agriculture budget policy analysis for the Congressman, then a member of the House Budget Committee. 

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The regional metro analysis concept has been expanded to include regional energy production economies with the establishment of the Texas Permian Basin Petroleum Index, the Texas PetroIndex, a statewide index-based analysis of the state’s energy production economy produced monthly for the Texas Alliance of Energy Producers. In addition, he also consults on economic and analytical policy matters and conducts various industry-related economic impact studies in Texas. 

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Ingham is member of the US Association for Energy Economics (USAEE), and holds his affiliation with the Houston chapter of that organization. He also serves on the natural gas supply and demand panel for the Independent Petroleum Association of American (IPAA), and is a frequent commentator in various local and statewide media outlets with regard to oil & gas prices and markets. 

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