It’s getting harder to ignore the 800-lb gorilla in the room with sub-$70 oil. So we’ll pass on the topic of technology this month to address the issue of greatest interest to the industry, which is how the recent downturn in commodity prices will impact drilling.

Sentiment deteriorated rapidly in December 2014, primarily over future uncertainty in business conditions. Operators were reformulating 2015 capital spending plans with early estimates from the sell-side financial houses speculating on a spending downturn from 8% to 15%, depending on which side of the $70 line oil settles on in 2015.

Oil prices had been kind to the industry over the last three years but not so much lately, with oil dropping 30% from its peak in June 2014 to the post-OPEC meeting low below $70 in December.

Projections of field activity for 2015 have followed a similar trajectory. Early prognostications centered on a 200-rig decline in a sub-$80 world. When domestic pricing dropped below the $70 marker, those projections ballooned to 500 rigs, with the carnage slated for first-half 2015.

If the issue is balancing global crude supply, then U.S. land drilling is not the only geographic sector facing pressure. Higher cost oil sands and offshore projects also will contribute to the cutbacks that create a rollover in global production, giving domestic drillers time to hunker down for the year to 18 months it takes production to overshoot to the downside. Look for a new round of consolidation opportunities in a tough environment.

But if the brunt of supply rebalancing involves North American tight oil, the question becomes more acute. In this case, the last man standing will be companies who have acreage in the core tight-formation oil plays where breakeven costs are below $50. Outside the core, it’s a matter of incrementals as marginal areas fade and emerging plays stop emerging.

Even with a drilling cutback in the first half of 2015, domestic oil production will continue rising in 2015—and likely 2016—though at rates measured in hundreds of thousands of barrels per day instead of a million barrels or more, prolonging the agony.

Operators have minced few words in announcing their intent to lean on service companies to reduce costs. But roughly half of the decline in domestic well costs over the last three years stems from competition associated with a previously oversupplied service sector. Oil service companies were on the threshold of realizing pricing improvements in third-quarter 2014 when the commodity price decline unfolded.

At peak this past summer, monthly domestic oil and gas revenues stood on the threshold of $40 billion, just a couple billion dollars shy of the 2008 peak. Now monthly revenues are closer to $30 billion, or about mid-2013 levels when rig count of 1,700 land units was 175 units lower than mid-December 2014.

Forecasts of a 200-rig decline are tough but livable. A 500-unit decline would signal a return to levels last seen in the spring of 2010, in which case the only good news is the worse it gets, the greater the recovery.

Editor’s note: Scott Weeden is currently on medical leave.