Texas Governor Rick Perry predicted “This is going to be a painful period of time” in regards to the ever falling price of oil. The remarks came Friday as Perry was speaking to a conservative forum in Austin.
Perry made one point very clear, according to an article by Wolf Richter that was republished in Business Insider: the oil bust will not be easy. Richter wrote that it won’t be easy for any oil-producing state or for the nation.
Cutbacks in the oil patch have already begun. Helmerich and Payne announced they would idle an additional fifty drilling rigs. They had previously idled eleven rigs. The impact was to reduce its shale drilling by twenty percent.
“They all know they’re staring down a cliff, they just don’t know how far it goes yet,” said Dave Anderson, an oilfield service and equipment analyst at Barclays on Friday, according to an article published Friday on FuelFix.
The article states that Texas still leads the nation in oil production. Perry said the impact will likely not hit Texas like the oil bust in the 1980s because Texas has diversified.
However, the Governor singled out Midland, Odessa and “parts of Houston” as areas that will “have to make some changes.”
Perry told the group he believes the downturn in oil prices will be a “relatively short-lived economic challenge” statewide.
On Monday morning, Texas Comptroller Glenn Hegar made his Biennial Estimate Review (BER) in Austin. During this review he is expected to discuss the impact of falling oil prices on the State’s revenue estimate. Legislators will use the BER to develop the Texas budget for the next two years. The Texas Constitution requires the Legislature to produce a balanced budget during the legislative session which begins this week.
Breitbart Texas previously reported on the potential impact of falling oil prices on the Texas economy.
Bob Price is a senior political news contributor for Breitbart Texas and a member of the original Breitbart Texas team. Follow him on Twitter @BobPriceBBTX.