Saturday, May 15, 2010

Impact of the Gulf of Mexico oil spill on the Texas oil industry

by Peter Stern

The Gulf of Mexico oil spill may have a more positive effect on the Texas oil industry than anywhere else in the continental United States. There are several reasons why Texas may benefit from an otherwise tragic and environmentally threatening offshore drilling occurrence. Unlike the population of many other states, most Texans are pro-oil drilling because the oil industry is a major player in maintaining a strong, successful Texas economy. In fact, Texas is one of the last states to be touched by the national recession and increased unemployment that have hurt the economies of most other states. One of the main reasons for the state’s economic strength during the past decade is the successful growth of the oil industry, which only recently has felt the economic slowdown.

Texas Governor Rick PerryIn addition, has maintained a strong platform of pro-oil and pro-business which continues to provide the oil industry and other corporations with a business-friendly environment that offers lucrative tax breaks and other perks to those industries who opt to do business in Texas. One of the reasons why the impact of the Gulf of Mexico spill may be more positive on the Texas oil industry than the industry in most other states is that Gov. Perry has played-down the rig explosion and oil spill by publicly acclaiming the tragedy as “an act of God,” a proclamation that relieves British Petroleum and industry manufacturers from any direct responsibility for the fatalities and any further environmental devastation. Another reason for his proclamation centers on his November bid for reelection, as Perry looks to bring in more votes from the religious right, which has increased its strength and control throughout the state.

Furthermore, perhaps more so than in any other state, Texans love their large pickup trucks and SUV’s. They also enjoy one of the lowest costs of gasoline and oil in comparison to most other states. The majority of Texans seem less interested in using alternative fuels than the residents of other states. Even during the U.S. economic slowdown, the Texas oil industry is enjoying profit-making even though the revenue is less than it was during the past decade.

Another primary reason why the Gulf of Mexico oil spill may have a more positive impact on the Texas oil industry is that the spill is not a direct threat to the Texas coastline, as the oil slick is moving easterly in the opposite direction, nearing the state of Florida. So far, the oil spill has not had a major impact on the Texas seafood industry as it already has taken its toll on Louisiana’s coastline.

Lastly, since the Gulf of Mexico oil spill has already impacted negatively on Louisiana’s oil production and is currently threatening Florida’s offshore drilling activities, the Texas oil industry may need to pick up the slack in oil production, which would most likely strengthen the Texas economy and provide additional opportunity to the Texas oil industry. Consequently, the impact of the Gulf of Mexico oil spill on the Texas oil industry may be a positive factor, despite the overall tragic nature of the occurrence.

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