According to a report in The Texas Tribune, President Trump’s pledge to bring the price of a barrel of crude oil down to $50 could signal trouble for Texas. Trump suggested the U.S. should control Venezuela’s oil after the recent arrest of its President Nicolas Maduro. The Tribune said this week, “Trump … could certainly deliver on his promise to lower fuel costs for consumers by flooding the market with the South American country’s oil.”
The Tribune talked to officials from west Texas who said that “the result would be damaging for Texas oil and gas production, the backbone of the state’s economy.” The report added, “Operators will find it harder to break even on costs – much less profit – resulting in dwindling production for the industry’s estimated 495,000 Texas employees. And parts of Texas, such as the Permian Basin, where city and county governments rely on oil and gas, stand to lose revenue as a result.”
Tom Manskey, economic development director for Odessa, said oil prices that low “could injure the regional economy.” He told The Tribune, “I would imagine it would have a negative effect on our region with regards to jobs and everything else.” Economist Ray Perryman said oil at $50 a barrel would “cause trouble and major market shifts… There would clearly be winners and losers.” Todd Staples, president of Texas Oil and Gas Association, added, “The Texas oil and natural gas industry has a long history of delivering essential products while navigating price volatility.”