In an interview with Rick Amato, Chad Brownstein explained how the effects of the recent oil price drop actually affect both sides: businesses and consumers. The energy expert and chief executive officer of Rocky Mountain Resources started by reminding everyone how the impact of oil price-drop on employment is bigger than what everyone had predicted.
“The consumer today is down 15% in the last 45 days at the gas pump. The consumer is down $0.75 in heating oil. The consumer is benefiting from oil today at $80 a barrel. The consumer is feeling it,” said Brownstein, answering the first question regarding whether the widespread effects of plummeting oil prices are felt already. It is clear that the drop in oil prices is benefiting those with jobs, sufficient income and a solid livelihood. This includes small business owners, whose costs may be lowered due to the drop in oil prices.
On the other side of the scale, there are oil companies and oil patch owners who are now sitting under the cloud of uncertainty. It is said that the oil and gas industry in the United States created over 1.2 million jobs over the last 24 to 36 months. This will soon change, since industry experts and business practitioners are now in a wait-and-see pattern. With oil price being at the current $70 per barrel level, there is no more certainty, particularly regarding whether capital projects are still viable.
When asked whether the figure can be increased to accommodate the 93 million Americans who are now unemployed, Brownstein confidently said yes. With the correct strategy by the government, and several basic changes in regulations, it is possible to boost the United States oil industry and open up jobs for unemployed Americans. Right now, there is a limit on how much oil can be exported. With the price going lower and the limit in place, oil fields will soon start lowering their production levels. When this happens, there will be fewer investments in the industry as well.
Lift that limitation, and oil fields can enhance their productions for foreign markets, opening up more jobs to unemployed Americans. There will be more investments as well, since the US oil fields are among the most productive in the world. With the regulation adjusted, there will be no more capital thirst in the industry.
This means both the consumers and producers in the oil or energy market can benefit from the drop in price. With the oil price being this low and production maintained at 9+ million barrels a day – particularly with exports allowed – there will be no dependency on the Middle East. The US government has the opportunity to transform this nation into an energy-independent country.