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IEEFA Gas Chat: Even before COVID-19, the oil and gas industry’s model was broken (PODCAST)

May 13, 2020
Clark Williams-Derry and Bruce Robertson

The global fracking industry has a fundamentally broken business model which is: Let’s produce as much oil and gas as we can and hope that prices rise as a result.

“It’s completely backward”, says IEEFA’s Clark Williams-Derry.

“What we’ve ended up with is a global supply glut and weak demand.”

With COVID-19, oil and gas prices have plummeted, supply is absolutely bulging, tankers filled with oil have nowhere to go, and fracking bankruptcies are the latest boom.

“This is the new normal,” says Williams-Derry. “There is too much LNG, and prices are too low to make a profit.

“As a result, a lot of producers and buyers will be in a difficult position, but so too will investors.

“The U.S. is starting to export its gas glut to the world.

“The result will be a mass destruction of wealth. You can’t produce cash when the prices are too low.”

This week, IEEFA’s Gas Chat is joined by IEEFA analysts Clark Williams-Derry from the U.S. and Bruce Robertson from Australia to talk about what’s happening around the globe in the oil and gas industry.

Listen to the podcast here: Even before COVID-19, the oil and gas industry’s model was broken



Related links:

IEEFA podcast: Greenhouse emissions from gas higher than industry estimates

IEEFA podcast: What’s the ‘new normal’ post coronavirus? Australia says gas.

More gas bankruptcies in the U.S. and a surprising outcome from Santos’ AGM today

Clark Williams-Derry

Clark Williams-Derry focuses on the finances North America’s oil, gas, and coal industries. His areas of expertise include: the long-term financial performance of North American oil & gas companies, particularly fracking-focused enterprises; company- and basin-specific studies of oil and gas production; U.S. LNG exports in the context of global markets; and U.S. and Canadian coal export projects.

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Bruce Robertson

Energy Finance Analyst – Gas/LNG, Bruce Robertson has been an investment analyst, fund manager and professional investor for over 36 years. He has worked with Perpetual Trustees, UBS, Nippon Life Insurance and BT. He has appeared as an expert witness before a number of government enquiries into energy issues.

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