‘Scary, unknown’: Fort Worth workers struggle to navigate the coronavirus economy
Click here to download the entire article from the Fort Worth Star Telegram featuring Alliance Chairman Cye Wagner. (A portion of the article is shown below)
By Gordon Dickson | Monday, July 06, 2020 06:00 AM
Brian Golden’s job is safe for now, but he worries about what lies ahead.
“It’s going to be a bad winter for a lot more people,” said Golden, 53, an aircraft mechanic at Fort Worth-based American Airlines. The company has announced plans to cut about 5,000 management and support staff jobs as it slashes costs to avoid bankruptcy.
The COVID-19 pandemic is battering the Fort Worth-area economy in thousands of ways, and Golden’s experience in the hard-hit aviation sector — which happens to be
But the numbers only tell part of the story.
To understand more about how COVID-19 is affecting the Fort Worth area economy, the Star-Telegram asked people from some of the job sectors hit hardest by the downturn to share their stories. The people we interviewed give personal glimpses into the effects of COVID-19 on industries such as oil, ranching, health care, restaurants and retail.
Although their backgrounds are varied, many have shared concerns — including their ability to make ends meet financially, and the health of their loved ones.
“The workload hasn’t changed from our company, or the kids’ school. It just all has to happen intermixed and intermingled now,” said Cye Cooper Wagner, a petroleum engineer and co-owner of her family’s Cooper Oil & Gas Inc.
Wagner and her husband Kyle are guiding her family’s second-generation company through historically tough times for the oil and gas industry, while also caring for their 7-year-old daughter, Davis, and 4-year-old son, Conrad.
“Twenty-four hours in a day doesn’t seem to be enough any longer, and our threshold for the definition of ‘busy’ or ‘swamped’ has changed dramatically,” she said.
The Texas Alliance of Energy Producers’ Texas Petro Index (TPI) dropped steeply from March to April as the state’s oil and gas economy began to register the full effects of COVID-19, the Saudi-Russian price war, and the resulting economic shutdown. The TPI is a monthly measure of growth rates and cycles in the Texas upstream oil and gas economy, based on indicators such as price, rig count, drilling permits, well completions, and employment. The index is based at 100.0 in January 1995.
The TPI fell to 171.0 in April, down from 181.9 in March.
This 10.9 point drop is the second largest monthly decline on record. The TPI fell by 11.0 points from September to October 2015, during the 2014-2016 downturn.
The April 2020 index is down 19.7% from the April 2019 index of 212.8.
The recent cyclical peak in the TPI is 213.8 registered in February 2019, and the index has logged 14 straight monthly declines (through April) since then.
Daily crude oil production declined by an estimated 235,000 barrels from March to April, the largest monthly decline on record.
Estimated upstream job losses of 25,800 from March to April is the largest monthly drop on record (in terms of the number and percentage of jobs lost).
Only 456 original drilling permits were issued in April, the lowest monthly level since at least January 1994, the first year of data collection for the TPI.
“The Texas upstream oil and gas economy was already in a state of decline when COVID-19 came along, with drops in the number of working rigs and industry employment, but the rate of decline has obviously accelerated sharply in March and April,” said Karr Ingham, Alliance Petroleum Economist and creator of the Texas Petro Index. “The worst of the demand contraction is clearly behind us at this point, and hopefully we’ve seen the worst of the crude oil price environment in April as well. However, the fallout will continue for some time with more to come in the way of employment loss and idled production capacity, and the Texas Petro Index is certain to continue its decline in the coming months.”
Additional Analysis and Findings:
Most components of the TPI declined from March to April, with the exception of oil and gas well completions and natural gas prices. Completions is a lagging indicator that reflects pre-COVID drilling activity. Natural gas prices were higher thanks to stronger Permian gas pricing in April based on the prospect of lower associated gas production in the region.
Otherwise, crude oil prices, the rig count, drilling permits, oil and gas production volume and value, and direct industry employment dropped sharply in April from March levels, including record one-month employment loss.
“The upstream oil and gas employment sector, reflecting jobs with operating and producing companies, oilfield service companies, and drilling companies, shed an estimated 25,800 jobs from March to April, easily the largest monthly drop on record in terms of the number and percentage of jobs lost,” said Ingham.
Overall Texas oil and gas employment fell to a 10-year low in April. The monthly estimated upstream employment level of just under 180,000 jobs fell to the lowest level since March 2010. By contrast, industry employment in Texas fell to a cyclical low of 181,600 jobs in September 2016 during the 2014-2016 industry downturn.
Of significance is the crude oil production drop from March to April as statewide production embarks on its first sustained decline since 2015-2016, according to Ingham:
“These numbers are very difficult to estimate in the near term, especially during a period of rapid transition from growth to decline. However, by our estimates daily crude oil production declined by about 235,000 barrels from March to April, by far the largest monthly decline on record with more to come in May. This is important, because the discussion surrounding proration in Texas was whether the state should mandate production decreases by Texas operators as opposed to allowing the market to take its course. This makes it clear that market-imposed production declines in response to crashing demand and lower prices are rapidly adjusting Texas supply to current market conditions. Importantly, Texas operators will also need the flexibility to respond as prices recover.”
In addition to shut-ins of current production, capital spending and new drilling has fallen sharply as well. The statewide rig count in April dropped by 111 rigs on average for the month compared to March and continues to decline. Incredibly, the 456 original drilling permits issued in April is the lowest monthly level since at least January 1994, the year data collection began for the Texas Petro Index, which is based at 100.0 in January 1995.
The Journal Record: “EPA may let oil waste in waterways. Is the public at risk?” by Mike Lee, E&E News, December 4, 2019:
Power For USA: “The Next Shale Oil Battle,” by Donn Dears, December 6, 2019:
Shale Magazine: “10 Ways to Advance Produced Water Recycling and Reuse,” by Blythe Lyons, John Tintera, and Kylie Wright, November/December 2019 Issue:
Oilman Magazine: “The State of Water 2019: How to Sustain the Oil and Gas Industry’s Lifeblood,” by Blythe Lyons, John Tintera, and Kylie Wright, November/December 2019:
US oil producers are bracing for a tough end to 2019: flat prices, falling rig counts, slower drilling permits and fewer well completions.
Karr Ingham, a petroleum economist from Amarillo, Texas, and the executive vice president of the Texas Alliance of Energy Producers, says those factors will not lead to lower oil production — just a slower rate of growth than the record pace we saw in 2018.
In addition to the price and production outlook, we talked about an issue that could become an existential threat to the industry: the rapidly increasing volumes of produced water, how to recycle more of it, where to dispose of it as reservoirs fill up – and the potential for additional regulation if a future Democratic president wants to enact a fracking ban.
Alliance Health Insurance Program is Off and Running
The Alliance recently announced the establishment of the association’s new health insurance initiative and quotes are now being offered by Alliance partner Davidson Insurance Services along with Assured Benefits Administrators (ABA) and other service providers.
The program offers high-quality health insurance products the Alliance member companies and their employees at potentially significantly lower rates, in fact as much as 40% lower according to Bobby Davidson and Fred Meijering of Davidson Insurance Services. The program also includes vision and dental.
Click here to download the Assured Benefits Administrators (ABA) brochure.
Click here to download the Lifestyle Health Plans brochure.
To begin the quote process, please call Janet Jennings at 972-980-4884.
Save Money with Alliance Insurance Programs & Employment Services
Since 1987, Alliance members have realized savings of 10 – 20% on rates and have qualified for dividends** totaling over $30 million***. You do not have to be an Alliance member to get a quote! Simply have your agent request a quote in the program of your choosing and if you are happy with it, you can join the Alliance at that time. For additional information regarding the Alliance Insurance Programs, please call One Star Insurance Solutions at (877) 234-2330.
Property, General Liability, Business Auto, Pollution
BITCO Insurance Companies offer Property, GL, Business Auto, Pollution (including underground resources and saline substance contamination), and Oil Lease Property, with special pricing and the potential for safety group dividends for Alliance members. Since 1998, over $25 million has been returned to Alliance members in the form of dividends*.
If your agent is appointed by BITCO, ask them to submit your account direct requesting a quote in the Alliance Safety group. If you are already insured by BITCO, your agent can put you in the program at your next renewal. If your agent is not appointed by BITCO and you want the benefits of this program, contact Curtis Heptner, Managing Member of One Star Insurance Solutions, LLC at (940) 397-2771
Texas Mutual Insurance Company underwrites the first Workers’ Comp Safety Group for the oil & gas industry in the state, established and certified in 1993. Since 2020, over $5.5 million has been returned to Alliance members in the form of dividends*.
Any agent in the state can access and request a quote in this open group. Have your agent contact Curtis Heptner, Master Agent at (940) 397-2771 with any questions.
Employer’s Liability, Occupational Accident
BFHD Financial Services has discounted rates including Employer’s Liability and ERISA documents on the Occupational Accident Plan for those opting out of Worker’s Compensation.
Have your agent contact Jim Hawkins at (940) 761-1136.