Isn't the long-term impact of a drilling turn-down also related to the time off-line for the rigs? I know in decades past that early in the turn-down people got layed off and equipment companies lined up the gear. After a year, those companies sold gear and/or went bust, and some equipment disappeared permanently, as did the people who knew how to use it. After a while longer more went into disrepair or got sold for scrap and nobody cared. When demand grew again, there was no equipment, no workers, and not much of a support industry.

If the downturn in drilling is short, the equipment will still be available (and at a good price point), workers will be quickly regained and trained (and many will have stayed out of work, so salaries will be lower), and even if some of the support companies have folded others will be hungry and ready to grow.

I would think these factors, along with the fast-depletion curve of NG gas wells, will tend to create a fast-cycle oscillation in supply/price of about 18 months or 2 years. As field depletion sets in, or oil heads back up, NG prices will trend upwards as well though.

Am I wrong?