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发帖数: 4825 | 1 http://www.nytimes.com/2014/12/27/us/falling-oil-prices-have-ri
HOUSTON — States dependent on oil and gas revenue are bracing for layoffs,
slashing agency budgets and growing increasingly anxious about the ripple
effect that falling oil prices may have on their local economies.
The concerns are cutting across traditional oil states like Texas, Louisiana
, Oklahoma and Alaska as well as those like North Dakota that are benefiting
from the nation’s latest energy boom.
Here in Houston, which proudly bills itself as the energy capital of the
world, Hercules Offshore announced it would lay off about 324 employees who
work on the company’s rigs in the Gulf of Mexico at the end of the month.
Texas already lost 2,300 oil and gas jobs from October to November,
according to preliminary, seasonally adjusted data released last week by the
federal Bureau of Labor Statistics. On the same day, Fitch Ratings warned
that home prices in Texas “may be unsustainable” as the price of oil
continues to plummet.
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In Louisiana, the drop in oil prices had a hand in increasing the state’s
2015-2016 budget shortfall to $1.4 billion and prompting cuts that
eliminated 162 vacant positions in state government, reduced contracts
across the state and froze expenses for items like travel and supplies at
all state agencies. Another round of reductions is expected as soon as
January.
And in Alaska — where about 90 percent of state government is funded by oil
, allowing residents to pay no state sales or income taxes — the drop in
oil prices has worsened the budget deficit and could force a 50 percent cut
in capital spending for bridges and roads. Moody’s, the credit rating
service, recently lowered Alaska’s credit outlook from stable to negative.
“The crunch is coming,” said Gunnar Knapp, a professor of economics and
the director of the Institute of Social and Economic Research at the
University of Alaska Anchorage.
Experts and elected officials say an extended downturn in oil prices seems
unlikely to create the economic disasters that accompanied the 1980s oil
bust, because energy-producing states that were left reeling for years have
diversified their economies. Nor are the effects on the states anything like
the crises facing big oil-exporting nations like Russia, Iran and Venezuela.
But states that have become accustomed to the benefits of energy production
— budgets fattened by oil and gas taxes, ample jobs and healthy rainy-day
funds — are now nervously eyeing the changed landscape and wondering how
much they will lose from falling prices that have been an unexpected present
to drivers across the country this holiday season.
“Our approach to the 2016 budget includes a full review of every activity
in every agency’s budget and the cost associated with them,” said Kristy
Nichols, the chief budget adviser to Gov. Bobby Jindal of Louisiana. “
Nothing is off the table at this point.”
A study published in 2013 by the Council on Foreign Relations suggested that
job losses from a sharp decline in oil prices would be largest in Wyoming,
Oklahoma and North Dakota.
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But Louisiana, which has a smaller and less diversified economy than Texas,
is already feeling the sting of the price downturn because it relies on more
oil and gas money for its operating budget. Louisiana loses $12 million for
every $1 in decline in the annual average price of oil, according to Greg
Albrecht, the state’s chief economist.
“From a strictly budgetary perspective, Louisiana is more sensitive to all
of this,” said James A. Richardson, a Louisiana State University economist
who serves on the state’s Revenue Estimating Conference, which determines
how much money can be plugged into the budget. “It shows up in our house
much sooner.”
Gifford Briggs, vice president of the Louisiana Oil & Gas Association, said
some sections of the industry were beginning to scale back as reality set in
and prices dropped. Though production in existing wells is expected to
continue apace in the coming months, companies are already shrinking their
drilling and exploration activity, he said.
“Landmen say they’re laying off everyone they have right now until things
pick up,” he added, referring to the independent firms that provide
services to exploration and drilling companies.
In the mid-1980s, as oil prices sank below $12 per barrel, bumper stickers
and signs in Louisiana asked those leaving the state for jobs elsewhere to
“please turn off the lights.” Houston lost 221,000 jobs from 1982 to 1987,
and people in West Texas still talk about Black Friday — Oct. 14, 1983 —
when the First National Bank of Midland closed, in what was then the second-
largest bank collapse in United States history.
“I remember one of my supporters was driving a Rolls-Royce, and he was
flying a jet airplane,” said Mark W. White Jr., the governor of Texas from
1983 to 1987. “Within 90 days, he was renting a Ford, and he went from a
Learjet to Southwest Airlines. When that bank went out, he went out.”
Experts say the situation today could have been far worse if oil-producing
states had failed to diversify their economies, remaining as dependent on
oil and gas tax revenues as they were 30 years ago.
The portion of the state budget in Louisiana linked to oil and gas revenue
is about 13 percent, compared with 45 percent in the 1980s. The Houston
region’s projected job losses in the energy industry are likely to be
offset by the nearly 63,000 jobs that it is expected to add in construction,
retail, health care, food services and other industries in 2015.
But in Houston, one energy job has the purchasing power of three non-energy
jobs, according to the Greater Houston Partnership, a regional business
association.
The scale and duration of the anticipated budget woes in oil-rich states
remain uncertain. Economists and industry analysts say it is unclear how low
oil prices will drop and for how long.
In North Dakota, which the Bakken shale field has made the second-highest
producer among oil states behind Texas, officials said a major blow to the
state’s oil and gas revenues could delay onetime expenditures for highway
improvement or water projects, but the state’s general operations would be
relatively unscathed, since only a small portion of its oil and gas money
goes toward operations.
Continue reading the main story Continue reading the main story
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In Texas, oil and gas loom as a defining characteristic, but the role they
play in the state economy, while sizable, has diminished in recent years as
other industries, such as health care, biotechnology and software, have
grown. Oil and gas jobs make up only about 3 percent of nonagricultural jobs
in Texas, a far lower share than government (16 percent) and education and
health services (13 percent).
“I foresee Texas being the economic magnet that it is, continuing to grow
and diversify its economy, so that any drop in the price of oil will be
minimized,” said Greg Abbott, who will be sworn in as the governor of Texas
next month.
Still, the economic forecast in Texas has become a shade gloomier for the
first time in years. This month, the American benchmark for crude oil, known
as West Texas Intermediate, dropped below $60 a barrel for the first time
in more than five years, a fast-paced collapse from June, when the price was
more than $100 per barrel. The drop in oil prices from June to December has
amounted to a loss of $83 million per day in potential revenue for the
industry in Texas, the Greater Houston Partnership said in a recent report.
To some Texans, the volatility and uncertainty are a routine part of life in
an oil state.
“We have these cycles,” said Jerry Patterson, the Texas land commissioner
and a former state senator who recalled being laid off from a job as a
salesman in Houston during the oil bust of the 1980s. “I can remember 30
years ago when $40 oil was a big-time plus. And it went down to, I think,
under $10, and you would see bumper stickers that said, ‘Dear Lord, please
bring back $40 oil. I promise I won’t screw it up this time.'”
Manny Fernandez reported from Houston, and Jeremy Alford from Baton Rouge,
La. Kirk Johnson contributed reporting from Seattle. |
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