- Not only has the stockmarket been falling hard

in the last few weeks, oil and gas prices

have plunged as well, andthey are still down today

with the benchmark WestTexas Intermediate Crude

selling around $31 a barrel today.

To put that into context for you,

the price had been over $60 a barrel

at the start of the year,

and it was still selling over $40 a barrel

before the price collapse Sunday.

Oil prices are now at theirlowest level in four years.

And we're joined now byTodd Staples, the president

of the Texas Oil and Gas Association.

Todd, thank you so much for joining us.

- Good to be with you today.

Wish it was better circumstances.

- Absolutely.

We know that this is anextremely challenging time

for oil and gas producerswith the price of oil;

what are you hearingright now from producers?

What are their concerns?

- Well, make no mistake, weare in a very unique situation

with the world healthpandemic that's occurring

that is shrinking demand,

all while supply is been increasing.

And so it's pushed the price point

for the production of oil and natural gas

to just uneconomicproportions, and as a result,

companies are makingsignificant changes this year.

They are reducing capital expenditures;

they had plans for rigsto be out exploring

and producing oil and natural gas,

and those plans have beenreduced significantly

as a result of this contractionthat we're experiencing.

- We know that there'sconcerns, of course,

about the length of this contraction

and that this downturn in prices

could turn some out of business,

and that the White House isconsidering federal assistance.

Could that make a difference?

- Well, we don't know thelength and the duration

of this situation.

We know that OPEC isscheduled to meet in June;

they could meet as early as May.

If they meet earlier, Ithink it's a good sign

that OPEC and her partners are recognizing

that the oversupply is workingagainst everyone in the world

since it is such a global market.

I don't know, I thinkmy federal counterpart

has indicated that industryis not looking at a bailout

from our federal government,

although we know thatgeneral business climate

needs to be a situation that makes it

where capital is attractedto the United States

rather than going to other countries

where production could occur.

- How long do you see oil producers

being able to stay inbusiness with the low prices?

What is the key price thatthey need to stay in business?

- Well, I think to have a healthy system,

50 to 60 dollar oil iswhat most economists

and analysts indicate,so at a reduced level,

it certainly is constricting on growth.

At this price point

it is going to be one ofa period of contraction.

We know that our companies are strong.

We know that we have good resources here.

We know that oil and naturalgas is a indispensable

part of our daily lives,

and so we think that,just as in times past,

that industry is nimbleand its responsive.

They will contract whilethese price points are low,

and as we see movement,and as we see changes,

they can respond accordingly.

- In terms of the ripple effect,

how the energy sector intersects

with the rest of the economy,

how do you see this allaffecting gas prices

for everyday Americans,and what other effects

might take place that we all might see?

- Well, consumerscertainly should experience

more favorable pricesat the consumer level,

but there are a lot of parts

that goes to getting oil produced

and then converted togasoline in our refineries,

and then being delivered toyour local convenience store.

The good news is is there's ample supply.

The industry is strong;

it has the upstream, midstream,and downstream sectors,

all that work in a verycoordinated fashion

to deliver the productsthat consumers rely upon,

and so there are base costsof delivering those products

that will still be in play,

but I think consumers will be experiencing

historically low prices, butthese prices are not healthy

for our overall economy.

Oil and natural gas in Texaslast year paid in excess

of $16 billion in state andlocal taxes and royalties.

These dollars fund our schools,they fund our universities,

they fund road construction,

and so with the activitylevel being lower this year,

you're going to see alower level of revenue

and a lower number of jobs,

and that's not a healthy situation.

So I think everyone wouldrecognize a price point

where good things happenand employment can occur

is certainly healthy for the economy.

- [Heather] All right,well I know a lot of people

are watching thissituation very concerned.

Todd Staples with the TexasOil and Gas Association.

Thank you for your time.