With an over-supply of domestic natural gas markets, uncertainty persists in the indicators of the Texas Petro Index, compiled by the Texas Alliance of Energy Producers. But economist Karr Ingham says we’re beginning to see the light at the end of the tunnel—job losses in the oil and gas industry may be bottoming out.
“We’ve had some industry recovery because of crude oil prices, and hopefully the natural gas picture will turn around as we move on into 2010. Certainly good news for those individual households that are affected when those jobs return to the oil patch, but it’s good news for Texas and it’s good news for Houston–it’s tremendously good news for Houston. A lot of those jobs are here. Texas is connected to oil and gas now, and really, to a greater extent than was the case ten or 15 years ago.”
Just a couple of years ago, expanding demand was pushing refineries to produce to capacity. But recently, there’s not been much of a call for building new refineries.
“And we started to see gasoline usage drop off in early 2008, actually, which is a little bit of a surprise to most people because it was the first time in a long time that that had happened. We’ve seen refiners ramping down in terms of their output. And so why would that be? Well, if you’re putting out a great lot of something that there’s a lower demand for, well your natural inclination and response is going to be to produce less of that product.”
The Texas Petro Index is a composite of indicators such as oil and natural gas prices, rig counts, well completions and employment statistics.