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Bankruptcies gash the oil industry as clean energy growth surges; a lesson for the Beartooth Front

It is often important for communities to understand macroeconomic trends in making local decisions regarding business development and growth. This is certainly true in the energy sector, where long-term trends are clear. Along the Beartooth Front, these trends are particularly important in light of what has transpired over the last two years.

2015 was not kind to oil and gas operators. Between the filings of WBH Energy Partners on January 3 and Swift Energy on December 31, a total of 42 oil and gas companies filed for bankruptcy last year, with a combined total debt of $17.85 billion. These are levels last seen during the Great Depression, with many more to come in 2016.

While the oil and gas industry is deeply depressed, the clean energy industry is growing quickly. According to Bloomberg New Energy Finance clean energy investment surged in 2015 to a record high of $328.9 billion, up 4% from 2013 and 3% from the previous record set in 2011. Global investment in clean energy has grown by nearly six times in dollar terms since 2004.

These trends are clear. Clean energy is replacing coal, oil and gas. The pace is gradual today, but market forces and government action will accelerate the change over the next two decades.

The oil market will probably recover in the short term, and there will probably be another boom. Another oil developer will come knocking on our door along the Beartooth Front, promising jobs and riches.

But we shouldn’t be fooled.

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