Today’s headlines are rife with bad news. Failing economies, rising unemployment, lower capital investments, and company bankruptcies are all on the hot list for journalists scrambling for news.

A recent report by consulting firm Ernst & Young is claiming that the “glass is half full.” The report points out, “The US oil and gas industry has experienced all of these, not just during the current financial crisis, but at many times during its 150-year history.” It also states that the industry has continuously proven its resilience in the face of adversity, whether it’s caused by downturns in supply and demand or outside forces beyond industry control. Recent market turmoil is unprecedented and, while it spells risk for some, opportunities abound for others.

The latest report titled “The Oil and Gas Industry and Financial Market Turmoil” speaks from a positive perspective on the industry’s current status. Namely, while the short-term demand for oil and gas is softening, the long-term demand continues to look modestly strong with a challenging long-term supply structure.

The world economy will continue to depend on the industry’s ability to find reliable sources of energy at economical prices. “Many oil and gas companies are currently very well capitalized and have large cash reserves, and thus will enjoy a liquidity advantage during a time of tighter credit,” the report said.

In 1901, Spindletop tripled US production and gave birth to the modern oil industry. Since that time, it has been characterized by booms and busts. “Near-term, in response to recent developments, companies need to focus on a back-to-basics approach to their operations and balance sheet,” the report said, adding, “Looking ahead, the financial crisis presents opportunities for well-capitalized companies to enter into acquisition transactions, from partnerships, find and nurture talent, grow their business in a more rational price climate and capitalize on opportunities for long-term hedging relationships.”

E&P companies should continue to invest with an attitude that “the glass is half full.” It would not only improve their own financial viability, but also the growth prospects of the entire world economy, the report added.

“The Oil and Gas Industry and Financial Market Turmoil” report was written by Marcela Donadio and Herb Listen, Ernst & Young LLC. A full version of this report can be located at