The slide in oil prices has continued into December, but Texas oil companies and boom towns say they aren’t too concerned. According to reports in USA Today and the Texas Tribune, many in the oil and gas field feel that Texas is prepared to weather the ups and downs of oil prices.
Texas has experienced oil booms and busts in the past, and the most experienced operators say that they have learned to prepare for price fluctuations. On the corporate level, many companies have signed deals locking in future selling prices to avoid fallout from exactly this kind of volatility. And many individuals who have struck it rich during the current boom have taken a similar approach, consciously hedging against volatility by eliminating debt first and then making diversified investments in businesses unrelated to oil.
In addition, according to the USA Today report, the new technology that has propelled the current boom also offers protection against short-term price drops. Because new technologies offer more oil production per acre, many companies can put off the expense of drilling new wells without creating problematic slowdowns in production.
Still, many of the local cities and towns remember the bust of the 1980s, and they are taking steps now to prepare for a possible end to the influx of cash. Many of these towns are investing first in infrastructure, and then in attractions, such as museums and convention centers, that will continue to keep the area vital no matter what happens in the future.
Overall, economists suggest that despite several months of falling oil prices, the Texas economy continues to exhibit signs of good health and growth.
