Oil Communities face prospect of years-long recovery
Friday, May 8, 2020

Communities reliant on the oil and gas industry say it may take years, not months, to bounce back from the coronavirus pandemic that's ravaging local economies.

Even in towns accustomed to the boom and bust cycle of oil markets, government officials say they've been hit with a double whammy.

With most service sector businesses shuttered to comply with stay-at-home orders, oil companies are scaling back production and laying off workers - a crushing combination in places where the health of the economy is tied firmly to the fossil fuel industry.

"The massive oil slowdown and the price drop affects literally every sector of the economy because the highest paid job sector is oil and gas and that basically supports a whole spectrum of other jobs," said Alaska state Rep. Chuck Kopp (R).

"Everything from our gym and fitness centers, nail parlors and salons, bars and breweries - which are very popular in Alaska - movies theaters, all the things you would normally see folks do are all severely restricted right now because of the shutdown," he added. "But the recovery is going to take even longer with the severe slowdown in the oil and gas industry.

Oil prices took a nosedive in April, trading at a record low by closing at negative $37 as futures traders sought to pay others to take physical possession of what had become a surplus of oil worldwide.

Even as companies have slashed budgets and cut production, there's still a global surplus, driven in part by a production battle between Saudi Arabia and Russia and exacerbated by a 30 percent drop in demands as lockdowns became the norm.

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