States Are Closing Oil Rigs at an Alarming Rate
The pandemic has dramatically decreased demand for oil and gas, and a new analysis shows producers are responding to the dip. Companies are idling the tools that help them tap fossil fuels under the Earth, slowing exploration down.
According to oilfield services company Baker Hughes, the number of operational rigs in the country dropped from 876 to 241 between August 2019 and August 2020. In that time span, the country’s top oil-producing state of Texas lost nearly a quarter of its rigs. North Dakota, the next biggest oil producing state, saw an even steeper shift, with its oil and gas rig count dropping from 51 in August 2019 to 10 this August. And Wyoming, which had 39 oil and gas rigs operating in August 2019 and 25 open in January, closed its last rig last month, marking only the second time since 1884 that the state has had zero in operation.
Meanwhile, the demand for fossil fuels is continuing to fall, so oil and gas prices are continuing to do the same. Oil prices plummeted on Tuesday morning, as did the price of natural gas. It’s becoming increasingly clear that these deadly energy sources are no longer a good investment, so rig closures are likely to continue.
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