From Boom To Bust: Permian Shale Towns Face Exodus
Perhaps it’s not evident to anyone who is not an oil-worker living in America’s biggest shale towns, but signs of the shale slowdown predicted by many analysts, and the EIA itself, are already surfacing in the form of vacant hotels, a dip in home prices, a noticeable reduction in overtime hours for oil workers, and a change in standards for hiring.
Texas’ Permian basin lost 400 jobs in the first 10 months of this year, according to the Dallas Morning News, and fracking contractor Superior Energy Services Inc. alone announced in late November that it had cut 112 jobs from its Permian Pumpco unit.
This is in stark contrast to the first 10 months of 2018, when the Permian added 16,700 jobs.
According to the Dallas Federal Reserve’s “Permian Basin Economic Indicators” from November 27 this year, oil production reached a new high in September, though the rig count slipped and drilling has dropped to its lowest level in nearly two years.
Not only are frack crews for well completions in the Permian down more than 20% this year, according to the Dallas Morning News, citing Primary Vision Inc., but oilfield services companies are firing people–from National Oilwell Varco to Halliburton and RPC.
The Greater Houston Partnership said in a December report that Houston is facing a situation that is “eerily similar to what it faced after the 1980s bust — an oversaturated real estate market, a bleak outlook for oil and gas, and the need for innovation to drive the economy forward”.
To that end, it’s putting its hope in other industries–not oil and gas–as it forecasts the disappearance of 4,000 oil jobs by the end of 2020.
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