Taking care of the economy also saves lives

Today the fields produce at a loss, as no barrel of the 880,000 that Colombia produces daily is profitable at prices of 26 dollars.

The quarantine decreed by the National Government began amid uncertainties. It is natural, as what we are experiencing has no precedent in contemporary history. A pandemic that has infected 416,916 people, of which 18,565 have died. And which has gradually led the world to close borders and citizens to isolate themselves in their homes to try to contain the spread of the virus and, where it is already massive, to mitigate it. A situation that is beginning to translate into a slowdown of the economy at a global level and in the country, with a significant impact -although still to be measured- on the social aspect.

With the exception of the major epidemics that have struck humanity (the Great Plague of Athens in 420 BC, the Justinian Plague in 542 AD -which devastated the Byzantine Empire- the Black Death that began in 1347 and claimed the lives of 60% of the population of Europe, the diseases imported to America during the Conquest, the cholera epidemic in London in 1854, and the Spanish Flu of 1918) few pandemics have had such a large effect. Not because of the number of deaths, as compared to date the Covid-19 deaths are very low, but because of its rapid territorial expansion and the impact on people's daily lives.

A common factor in these public health crises has been the effect on the economic and social situation of nations and, therefore, of their inhabitants. In some cases, due to labor shortages, especially for agricultural activities -due to massive human mortality-, in others due to religious persecution of those who were pointed out as the culprits of the plagues, due to prolonged confinements in poor hygiene conditions; due to job losses, and due to the panic that led to wrong decision-making, among them, the paralysis of essential activities for a minimal economic and social dynamic.

It is there where the lessons from past health crises should be useful, as well as the economic ones, the Great Depression of 1929, the real estate crisis of 2008, among others. And among the lessons learned is to seek, as far as possible, the continuity of fundamental activities for society, even to contain the pandemic. Hence the measures and exceptions that the National Government has established within the framework of the current quarantine, without prejudice to the fact that they may be reduced later if circumstances warrant.

It is essential, for example, to guarantee the supply of essential goods, such as food, medicines, and hygiene products; as well as the provision of services that ensure that these and other goods reach homes, such as logistics and transportation, financial and communication services, and very importantly, public services, among them, the supply of fuels -which involves the extraction of oil in the fields, its transportation, refining, and distribution- and the export of surplus crude; and similar with gas, essential for households, the industrial sector, and electricity generation.

A complex challenge, which also explains why thousands of people continue to work in the country, not from their homes, but in call centers, factories, ports, clinics, and service stations.

Due to family and individual isolation measures, the consumption of liquid fuels has decreased significantly and it is expected that during the quarantine it will reduce between 70% and 80%.

It is so because air, land, maritime, and river transport of passengers has been reduced as rarely in history; however, they continue to be required for cargo transport, to supply the country with essential goods and services, and so that, amid the circumstances, the paralysis of our economy is not total.

It is, however, a fatal coincidence of the coronavirus with the oil price crisis. Today, the fields are producing at a loss, as no barrel of the 880,000 that Colombia produces daily is profitable at prices of 26 dollars (Brent or WTI reference), especially when that oil is bought from us between six and ten dollars below the international reference. Nevertheless, companies continue to operate at least for a time that, depending on the field, can be weeks.

They do it for three main reasons: they remotely aspire for conditions to change, reopening a field is extremely costly; for the strategic importance it has for the country to maintain energy self-sufficiency; and lastly, because they know the fiscal impact that a cut in crude production has.

And one more reason in the current situation: because oil, whose derivatives, liquid fuels, and lubricating oils, are distributed by 18 wholesale companies to more than 5,000 service stations and to mechanical workshops, and this ecosystem is required so that those who transport food from the fields, from the Llano, the Coffee Axis, the Valle del Cauca, and Huila, among others, reach the highest consumption sites; so that the Police and the Armed Forces can move; so that technicians and electricians can go to repair network damages; so that ambulances can transport patients to clinics; and so that most citizens can, amid the circumstances, meet their needs and carry out their essential activities at home that only energy allows.

This is the case of the oil and gas industry which, like others, does not stop so that most Colombians can stop.