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To: Smokin' Joe

I’m a capitalist 35 years in. I’m quite familiar with the nature of economy. Now share your wisdom concerning the economic downside of “petroleum poker.”


35 posted on 02/09/2016 1:48:42 AM PST by Gene Eric (Don't be a statist!)
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To: Gene Eric
Shut down 1 oil rig. You lose 40 jobs immediately, but the supplies and equipment used to keep that rig running, from drilling fluid components (various from mines to chemical plants, plus the rail and truck freight distribution systems), to drill pipe and steel well casing (Steel industry, trucking, machinists), to vac trucks, to fuel haulers (vehicles, tires, parts), front end loaders, other earthmoving equipment to build the drilling location and road, gravel suppliers, the people who build cattle guards, make the barbed wire for perimeter fencing, make the fenceposts, make the hoses, belts, air valves, shaker screens, pump parts, etc...

It goes far beyond an oil rig. There is a host of equipment even to site housing and all that involves that isn't built, isn't replaced, isn't sold, isn't made, that hits industries all over the country. You see money going to the oilfield, but the 7-10 million it costs to drill and complete a well goes far and wide.

Cut the rig count by (here) 75% and multiply the above by 150, in this area alone.

That 7-10 million per rig per well can be multiplied by 15-20 depending on the rig--money which does not enter the economy.

All those guys who were doing that wide variety of specialty jobs required transportation, so those company trucks won't be made, either. (How many trucks? Halliburton (just one oilfield service company), is rumored have more vehicles than the US Army). The semi trucks won't be built to haul the materials and equipment, they won't need new tires once every year to 18 months.

Their wives won't have the paychecks to spend on everything from furniture to cars, appliances, or so many of the odds and ends women spend money on when feathering their nest. The guys who run the pizza joint won't sell as many pizzas, the toys won't be bought (grownup toys, the kids will still get toys, just not as elaborate or expensive).

You see a rock in a pond. You are ignoring the ripples, which go far and wide.

You will save $100 a month. I am happy for you. Like many who worked ourselves out of a job, I hope you spend your newfound wealth wisely, all $1200/year of it. Please don't spend it on foreign made crap.

38 posted on 02/09/2016 2:10:50 AM PST by Smokin' Joe (How often God must weep at humans' folly. Stand fast. God knows what He is doing.)
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