Oil boom in Texas is over?
The old Texan dream was always of oil. But the crash in prices has brought production to a halt in many refineries worldwide. In the lone-star state, fracking is the current hobby of the oil executives, playing with minor earthquakes and water contamination in large projects such as the Eagle Ford Field. To complete the rout, there only remains the biggest nail in the coffin- the veto by President Obama on the prestigious but heavily-criticised Keystone XL pipeline from Canadas shale oil fields in Alberta.
The mothballing of the $8 billion scheme, that seemed to be vetoed last week, has created even more disruption in the Texan industry where few engineers remain, working a much-reduced 50-hour week, while the refineries close. The active rigs themselves have been reduced to 168 from a high of 228, but this industry has only been here for a few years, invading a sleepy, almost uninhabited area near the Mexican border.
For a year or two, shale oil seemed to encourage the American dream of growth and cheap energy, but it was a literal (Keystone) pipe-dream. With reduced oil prices and environmental damage claims, the profitability is below zero, certainly in southern Texas. Thousands of jobs have disappeared and wells have shut down, possibly permanently. CBS estimated a possible 14,000 direct and indirect job-losses. This impacts on the US economy which has been short of jobs over recent years. The trouble is that economists see this as a boom and bust situation. The boom for oils is surely over, even if we can find employment for some people in minor oil production. Many workers are migrants in any case, many from thousands of miles away, so it should be possible to recover jobs nationwide. Car plants and many other industries have shown signs of recovery from much greater crashes, so it seems a matter of adjustment.
The future for renewable energy in the light of fossil fuel problems? The world is waiting, but many nations have advanced both solar and wind technologies to a level where others have used their expertise. China, Germany and parts of the US have a profitable industry, while newer technology has devised tidal power lagoons at Swansea Bay in the UK and wave power is making big claims recently in Sweden despite its slow developmental phase. An array of articles on oil booms, renewable energy, and gas can be found in our oil and gas section. Smaller hydroelectric power schemes are becoming more popular with good returns on investment for less developed countries.
It looks as though diversification is the answer. The oil age here began in 1901 and collapsed several times, often because of overproduction, even as recently as the 1980s, when house prices were caused to fall. The small new towns will suffer as their populations halve, back to pre-boom levels. And the oil? It will flow to some extent, despite environmental damage, climate change and obvious temperature rises. Lets hope the diversification will help these people to accept the oil age is really, really finished as in dead!