Oil and gas industry pundits have been bemoaning the fact that the present downturn is probably the worst since the 1980s. That down cycle produced oil prices below $10 per barrel or about $22 per barrel in today’s economy. The current price of oil has bogged down in the mid-$40 per barrel range. In spite of that, experts say that there are more than 500 deepwater OSVs on order or under construction worldwide, while OSVs are lined up like birds on a wire in every Gulf of Mexico oil patch waterway.

“This industry is both fascinating and frustrating,” analyst Allen Brooks, managing director, PPHB, a Houston-based independent boutique investment firm, told participants of the WorkBoat Strategic Leadership Development Program in Baton Rouge, La., in October. “There is always a lag in our knowledge when it comes to oil discovery.”

Brooks was not all doom and gloom. He said oil prices will rebound, but not where they were when the price fell off the table. “I can see better times for this industry by the second half of next year,” said Brooks. “It’s not going to go back to over $100 a barrel anytime soon. It’s going to be somewhere in the $60 to $70 a barrel range. I think that’s a realistic environment.”

Oil companies have too much oil and not enough patience. In a cyclical industry, the upturns never last long enough and the downturns last too long. For now, oil prices are being manipulated from a number of different sources, but supply and demand is front and center. “Saudis are producing at rates they’ve never produced at before,” said Brooks. “Global oil supply has outrun oil demand.”

Brooks said it’s important to take a long-term look at the industry. “The world population will grow until 2040 or so and then start to decline,” he said. “But there are more old people in the world, and old people don’t use as much energy.”

Brooks said Shell's pullout of the Arctic is about more than just the oil giant's business. "Shell's pullout will affect many workboat related businesses,” he said.

While newer products such as LNG are the wave of the future, Brooks said the oil industry has a real image problem that is hurting it now and will continue to be a mounting concern. “The oil industry lost the [public relations] war a long time ago,” he said. “The industry has done a poor job communicating. It just has a terrible history. PR didn’t seem important.”

Ken Hocke has been the senior editor of WorkBoat since 1999. He was the associate editor of WorkBoat from 1997 to 1999. Prior to that, he was the editor of the Daily Shipping Guide, a transportation daily in New Orleans. He has written for other publications including The Times-Picayune. He graduated from Louisiana State University with an arts and sciences degree, with a concentration in English, in 1978.