SBTM Jul 2015 - Page 29

EDITORIAL FEATURE Oil & Gas Bust – Is Texas on the Mend? By Sonia Clayton W e often hear the expression, “Everything in Texas is bigger and better.”  There is nothing missing from this colloquial expression when it comes to the Lone Star State, a land known for its resources, generosity, southern hospitality, and strong economy. Nevertheless, most oil and gas employers have being impacted by the punishing economic headwinds.   It is an obvious observation that Texas has been responsible for the majority  of the employment  growth  in the country within the last two years.  Impressively enough, 1.2 million jobs were generated here.  Oil, Gas, and Energy have consistently generated jobs in Texas and the nation for the last eight years and although lower oil prices may help most folks pay their bills in the short run, there is also much pain in low oil prices for the state that generated the most jobs in America in 2014. The oil price collapsed during Q3 and Q4, 2014 and continued through Q1 2015, impacting refinery processing rates, reduced imports, and a flattened domestic crude production as companies decommissioned 60 percent of active drilling rigs.   The domino effect was visible in the Texas economy and negatively impacting manufacturers of steel, construction materials, drilling operators, and many small businesses that depend on them and act as the job generators of this Southern economy.  Growth is stagnating in cities such as Houston, San Antonio, Midland, and Odessa.  So, the first reality manifested itself in January when the Texas Workforce Commission announced that the Texas jobs machine had slowed down as a result of the impact of lower oil prices. Texas has now moved down to the fourth position in job growth after California, Ohio, and Michigan   In Texas, we had news of layoffs from some of the largest employers in America such as Baker Hughes, Schlumberger, Chevron, BP, and many other oil and gas co-depending enterprises and operations.  As of today and through a new panoramic view, oil and gasoline prices seem to be on the rebound comparatively with last month’s activity showing a small recovery reaching a high on Wednesday, April 30th when the international Brent benchmark showed a value of $66.80.  However, based on the data provided by the Energy Department of the United States, this figure is still 30 percent below its demonstrated high during the summer of 2014.  It also represents an outstanding 40 percent increase compared with the price of March, 2015.   A POSITIVE NOTE The prognosis is good and points to an opti