Over the past couple of years, the state of Texas has seen quite the economic boom, much of which stems from the increase of the gas and oil industry. However, the energy prices are falling, and with the drop in oil, many are wondering if the state will be able to sustain that boom they’ve been experiencing. The opinions vary, as one would imagine.
How Has Texas Been Faring?
In the past five years, Texas has been growing very quickly, with an expansion of 4.4% each year, which is twice as fast as the country as a whole. Out of every seven jobs created in the US, one of them is in Texas. The unemployment rate in the state is only 4.9%, which is a full point lower than the rest of the country. That’s very promising news for Texas, but it is important to understand that much of the success they had is from the oil and gas industry. The increase in hydro fracking, for example, played a large part of the prosperity.
What Happens Now?
Now that the gas and oil prices are dropping so quickly, it makes many wonder just what will happen. The oil companies that were enjoying the energy boom are now starting to cut back. They are no longer willing to engage in exploration, and some are cutting back on their workforce to help them deal with the low prices. It’s not only the oil companies that are feeling this pinch though. US Steel, which recently had to lay off over a hundred workers in Houston, is having issues as well. The plant in Texas was making pipes for the oil industry. Without the need for those pipes, typically used for exploratory drilling and pumping, they simply can’t afford to keep on their workers.
Some are wondering if this will be reminiscent of the energy bust that hit Texas in the 1980s. At that time, the unemployment rate rocketed to more than 9%. However, times are different. Experts say that the banking crisis had much to do with the previous bust, and that Texas is a very different place today. The landscape is different and many other types of industries have come to Texas.
They feel that this energy crisis will not be anywhere near as bad, and that things will bounce back to normal as soon as the prices rebound.
About Oil Works Inc.
Oil Works, Inc. is a complete drilling rig equipment manufacturer and service provider based in the Permian Basin for over 20 years. OWI’s product and service offerings include Derricks, Substructures, Drawworks, Mud Systems, Walking Systems, Power Generation, Control Systems, Iron Roughneck Repair and Upgrades and complete Rig Solutions built to API and ISO standards. OWI is also proud to offer 24/7 Service and Support.
