With work in the Oilfield being a major source of income for residents in South Texas the lowering oil prices have been a cause of concern for many. With the start of lay offs and the concern of more to come we were able to speak with Dr. Jim Lee of Texas A&M Corpus Christi who is the Chair of the Department of Decision Sciences and Economics for some insight into the recent decline of oil prices.
“In terms of oil production the refineries are not going to feel a big impact from the drop in prices because they purchase from suppliers,” Lee said. “However it is the drillers and workers who are going to feel the impact during the collapse, it can lead to lay offs and restructuring of companies.”
The lay offs have already started for some sites around the Nueces County area and many are currently worried. With the lack of income looming over the heads of many there is also the additional worry of the impact this decline may have on the economy.
“As of December, the local economy in the Coastal Bend and Nueces County is still improving, which should provide some comfort to local residents and 2015 could be our best year to come,” Lee said. The Texas Workforce Commission shows the current unemployment rate for Corpus Christi at 4.3 percent which is the lowest it has been since 2007.”
With a note of optimism there is no doubt that things are starting to take a downturn for those who work out in the field. “Things are starting to shake up right now with a decline of 10 percent in the Eagle Ford Shale area in just a few weeks, but it is still early to know how long this is going to last.”
Though some of us are currently enjoying the savings we are seeing on gas, it is the men and women who depend on the oil industry to support their family who are feeling the negative impact of the recent decline. It is important however to note that though prices are currently lower the area of the Coastal Bend and Nueces County is still paying up to 10 cents more per gallon for gas than larger cities in Texas.
“Our local areas are very unique because they are so isolated,” Lee said. “We are still paying a little more for gas than our larger cities because of our regional and local factors.”
Dr. Lee explained that the lack of competition in our area is keeping prices slightly higher for our area of South Texas. “In larger cities if you don’t like the price of gas you can go somewhere else, however in our area if you do not go to one gas station the next one you go to will most likely be owned by the same people or place.”
In the end the lowering prices are still a concern for many, however there is still room for optimism. Expert opinions note that with the economy still showing signs of improvement it is too early to say just how long this downturn will last.