Innovations in drilling technology like fracking have certainly benefited Texas: new jobs, business opportunities and homes all constructed with oil profits. But with so much oil production, prices have been plummeting.
Yesterday West Texas Intermediate fell 2.6 percent putting it under the $60 a barrel level. This might be good news for people filling up at the pump, but what about the oil businesses and their employees?
The Texas Standard speaks with Mella McEwen, Oil and Gas Editor for the Midland Reporter-Telegram, about how the industry is responding.
On industry leaders balancing production with profits:
“No one can tell you for certain. They say they can make money at $40 or $50 a barrel. The big question is how much further will prices go, and how long will they stay at these levels. That’s what will effect future plans, but for right now, they’re planning to fairly much maintain the status quo, rather than accelerate activity.”
On signs of change in and around Midland:
“The only signs of change I’ve seen have been due to the incredible growth out here. We’re building three new elementary schools. There have been a lot of new hotels, restaurants, and stores. Occidental and Chevron are both building multi-million dollar campuses out here. But there’s no signs of buildings being shuttered, or windows being covered over.”
On the scenario of oil sinking to $30 a barrel:
“That would be bad news. That would be far too low. That would be almost like a revisiting of 1986… I think what we’re going to see is, and this just might be my personal hope, certainly there’s going to be a slow down, and it may not necessarily be bad news out here, because our infrastructure has been unable to keep up. But they’ve done long-term projections, and they also know what goes down, will also go back up.”