Permian Basin oil drilling and production in Texas and New Mexico has fostered a big jump in hydraulic fracturing jobs over the past decade, but production is slowing and is dragging local economies with it. A new report from the Federal Reserve Bank of Dallas shows that Texas lost about 8,100 extraction jobs from December 2018 to October 2019, nearly double the losses estimated earlier this year by the Bureau of Labor Statistics.
"Fracking has made the U.S. the world’s top oil producer, buoyed the national economy and helped the country become a net exporter of crude and petroleum products for the first time in decades," Rebecca Elliott reports for The Wall Street Journal. "But the rapid production growth of recent years is waning as shale companies, many of which have struggled to make money, focus on profits over expansion to satisfy unhappy investors."
Michael Plante, senior economist at the Dallas Fed, summed it up for Elliott: "The boom time is done at this point, unless oil prices go up significantly."
According to energy analytics firm Rystad Energy, North American spending on fracking is expected to fall about 6 percent in 2019 and drop another 14% in 2020, Elliott reports.
"In Texas, the nation’s top oil-producing state, energy industry employment has dropped at an annualized rate of 2.1% in the year to date through September, Dallas Fed data show," Elliott reports. "Such granular figures weren’t available in other oil-producing states, but BLS data show that in North Dakota, seasonally adjusted employment in mining and logging, which includes the oil-and-gas industry, fell about 9% from January through October. Employment has been steadier in Colorado and New Mexico."
In Texas and New Mexico, "trucks carrying sand, water and crude still clog the highways, new homes continue to be built, and regional unemployment was 2.4% in October, up from a recent low of 1.9% in April but below the national average of 3.3%, not seasonally adjusted, according to the Texas Workforce Commission," Elliott reports. "Still, oil-and-gas workers have begun to see their hours cut, and hotel occupancy in Midland has fallen 14% through the first 10 months of the year from a year earlier."
Michael Plante, senior economist at the Dallas Fed, summed it up for Elliott: "The boom time is done at this point, unless oil prices go up significantly."
According to energy analytics firm Rystad Energy, North American spending on fracking is expected to fall about 6 percent in 2019 and drop another 14% in 2020, Elliott reports.
"In Texas, the nation’s top oil-producing state, energy industry employment has dropped at an annualized rate of 2.1% in the year to date through September, Dallas Fed data show," Elliott reports. "Such granular figures weren’t available in other oil-producing states, but BLS data show that in North Dakota, seasonally adjusted employment in mining and logging, which includes the oil-and-gas industry, fell about 9% from January through October. Employment has been steadier in Colorado and New Mexico."
In Texas and New Mexico, "trucks carrying sand, water and crude still clog the highways, new homes continue to be built, and regional unemployment was 2.4% in October, up from a recent low of 1.9% in April but below the national average of 3.3%, not seasonally adjusted, according to the Texas Workforce Commission," Elliott reports. "Still, oil-and-gas workers have begun to see their hours cut, and hotel occupancy in Midland has fallen 14% through the first 10 months of the year from a year earlier."
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