Posted on 09/01/2015 5:42:24 AM PDT by thackney
In November 2014, the leaders of Saudi Arabia made one of the biggest bets in history. Their strategy was flawed, and they’ve already lost.
In an OPEC meeting that month, Saudi Arabia announced it would maintain high oil-production levels despite falling prices. The Saudis were betting that by keeping prices low they could protect their market share and kill America’s energy renaissance—a rebirth driven largely by Texas, which produces 37% of America’s oil and 28% of its marketed natural gas.
The Saudi strategy seemed to make sense. The conventional wisdom was that energy producers working in “tight” shale formations would be squeezed by low prices, since their extraction methods—hydraulic fracturing and horizontal drilling—are more expensive than conventional drilling. So, surely, once that happened Texas would be in serious trouble.
Columnists at the New York Times and elsewhere said the “Texas miracle” was fading, or even dead . . . and some of them seemed happy about it.
But an interesting thing happened on the way to the collapse of the Texas economy—it didn’t collapse.
First, many people still don’t seem to realize how diversified the state economy has become. In 1981 oil and gas production and its support services accounted for nearly 20% of Texas’ gross state product. Today, after years of incredible growth in the industry, it contributes less than 14%.
Dallas and Austin are booming today, but not because of oil and gas. Even in the 1990s when oil spent much of the decade at less than $30 a barrel, the state economy grew steadily.
And despite the slump in energy prices, oil and gas production in Texas and the U.S. has continued to rise. In fiscal 2015 oil prices were lower than my office had predicted, but revenues from Texas’ oil-production tax came in higher than expected...
(Excerpt) Read more at wsj.com ...
If I hear a woman with a NJ/NY accent on TV or in person, I get nauseus. That Mason/Dixon line is there for a reason: stay on your side and so will we.
I'm certain there are some conservative Yankees. I just didn't see any of them out here.
Having said that, I'm glad they are gone from this area - ungrateful bunch of loons.
There are other areas that are no longer booming, and where the fracking and more expensive methods have been suspended and workers laid off.
However, it’s my understanding that these methods can be resumed, should oil prices go up enough to make it profitable.
Texas isn’t the Saudis only target. The Russkies are hurting worse.
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