Despite a new state report showing the Wyoming economy is bouncing back, sluggish income growth and job losses, particularly in the oil and gas industry, mean the state’s overall progress is expected to be slow.
“The natural gas and oil industry follow the global markets and must utilize the oversupply that was created during the pandemic before we will see prices rise significantly and allow for increased production,” Ryan McConnaughey, communications director at the Petroleum Association of Wyoming (PAW), told The Center Square.
The oil and gas industry itself has been in a slouch and continues to seek recovery.
“The COVID-19 pandemic caused a historic drop in demand for petroleum products as the globe quarantined to slow the virus’s spread,” McConnaughey said. “This caused an oversupply in the global markets. We are starting to see the oil price move upward, and we are confident production will return as global economic activity resumes.”
The report was issued last month by the Wyoming Department of Administration and Information (WDAI).
“Wyoming’s recovery is really somewhat similar to the U.S. economy’s recovery,” Wenlin Liu, chief economist for the WDAI economic analysis division, told Wyoming Public Media. “The Wyoming economy continued to rebound in the fourth quarter. However, the slow recovery of Wyoming’s economy was mainly dragged by our oil and gas drilling activities.”
This year’s new federal mandates banning new oil and gas leases on federal lands, many of which are in Wyoming, have added to the state’s economic difficulties.
“The administration’s new policies around oil and natural gas will hinder the ability to produce in Wyoming due to its outsized reliance on federal lands for production,” McConnaughey said. “The natural gas and oil industry contributes more to Wyoming’s GDP than the following two sectors combined [travel/tourism and agriculture]. Therefore, production must continue for the well-being of our state and communities.”