At the start of the year, few predicted the turmoil that 2020 would inflict on the oil and gas industry. Oversupply and the collapse of demand created historic stresses on oil and gas prices. Long-term predictions for oil prices remain decidedly unoptimistic, and this low-price environment is the industry’s foreseeable future. In response, producers are looking to squeeze every dollar from their budgets in both capex and LOE. Everyone it seems, producers as well as suppliers, are in a fight to survive. Extraordinary cost of production It requires an enormous amount of energy to extract and move a barrel of oil or gas from the ground. In fact, energy costs are a huge percentage of most producers’ LOE. According to the U.S. Energy Information Administration, the oil and gas business consumes 2.5% of all distilled petroleum products. Anything that can lower those costs directly impacts the bottom line.

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