High oil prices fuel latest Texas boom
Tuesday, December 19, 2006 12:22:45 PM (GMT-06:00)
Provided by: Reuters News
By Bruce Nichols
HOUSTON, Dec 19 (Reuters) - Rick Parnell manages an oilfield supply store in West Texas, and he feels the buzz of boom times in the increased traffic through his front door.
"They're buzzing pretty good," said Parnell, whose B-P Supply Inc. has added three satellite centers in the Permian Basin oilfield to meet demand for pumps, valves and supplies.
With oil above $50 a barrel for more than two years, and as high as $78 this year, it will be a happy Christmas in Texas, center of the nation's oil industry.
High prices have triggered a boom in energy exploration and oilfield services -- and a big increase in high paying jobs in the sector.
"Houston is growing twice as fast as the nation," said Joel Wagher, an employment analyst with the Texas Workforce Commission.
But growth has spread across Texas, which accounts for 21 percent of U.S. oil production and 24 percent of natural gas, according to U.S. Energy Information Agency statistics.
Expansion has been strongest in oilfield support companies such as B-P in Andrews, said Karr Ingham, an economist for the Texas Alliance of Energy Producers.
For the year, oil and gas support employment in Texas rose 11.3 percent to 102,300 from 91,900 in 2005, Ingham said in a news release touting the growth.
Robert W. "Bill" Gilmer of the Federal Reserve Bank of Dallas says Texas A&M petroleum engineering graduates are being hired for $80,000 a year, with a $30,000 signing bonus.
"It's trickling out" into the rest of the economy, Gilmer said. "For a long time, all the stories you heard of were of shortages in engineering, skilled people. The last few months, I've heard from retailers having difficulty hiring," he said.
"Business is good at all our stores," said a spokeswoman for Neiman Marcus, the high-end Dallas-based retailer.
Gary Gaston sees, hears and feels the buzz driving to work every day in West Texas. Oil equipment yards are busy, pump jacks are rocking and radio ads scream for workers, he said.
"I see the smiling faces," said Gaston, executive director of the Permian Basin Regional Planning Commission in Midland.
BUST-TO-BOOM
In Houston, which considers itself the U.S. energy capital, as many as 100,000 jobs could be added this year when the numbers are finished, Gilmer predicted.
About 20,000 Houston area jobs have been added in oilfield equipment manufacturing, said Joel Wagher, an employment analyst with the Texas Workforce Commission.
The sector suffered in the boom-to-bust cycle of the 1980s but has rebounded with Houston becoming a petroleum technology center as oil production moves overseas, analysts said.
The national housing slump has bypassed Houston and, for the most part, Texas, said Barton Smith, a University of Houston economist who monitors real estate activity.
One reason: "With the exception of Austin ... we haven't participated in the speculative boom you've seen throughout the United States," Smith said.
Non-oil sectors of the Texas economy are growing at a slower pace, more in line with the national economy, Smith said.
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