Texas Comptroller Glenn Hegar in early February kicked off his “Good for Texas Talks” series by visiting with former Texas Agriculture Commissioner and current president of the Texas Oil and Gas Association, Todd Staples.
Hegar and Staples discussed the slumping price of oil and what it means for Texas’ economy and its industries.
Here’s a look at what they said:
Hegar: With prices where they are today, where do you see us going in the next few years with this global over supply problem?
Staples: We have to keep in mind – I know there’s theories about what drives oil and gas prices, but you and I both know there are two fundamental factors, supply and demand, and right now, we have a tremendous oversupply. The world economy this past year has contracted somewhat, so the demand has not been there, so it’s basically just driving pricing lower.
H: As we see around the world right now a contraction in businesses, some mergers, you also see people taking projects offline, that they are not going to start. They are pushing the timelines out further. How do you think that compares internationally versus Texas when prices do go back up? Do you think production will come back in Texas, or will it continue to be offline?
S: I think in a perfect world, it will come back in Texas. It depends on the price; it depends on whether we are maintaining a science-based regulatory approach with stability. So there’s a lot of factors to consider. If the price point stays where it is today, I think the end is not over yet in terms of contractions and mergers. It may surprise your listeners to understand that the oil and natural gas industry really believes in free-market principles. A lot of times people ask, what is your opinion on renewables, thinking that it’s a competitive issue and that we might want some things done legislatively, but my members are saying, ‘Look, let the free market determine this. Don’t allow government to be in the position of picking winners and losers; let consumers do that.’
At the end of the day, it’s all about getting a job. And that’s what we want for our kids, and we want them to have jobs in Texas. With manufacturing, with oil and gas continuing to be strong, the future is bright. It doesn’t mean we don’t have ups and downs. It doesn’t mean we don’t have some challenges in the short term. It doesn’t mean that we’re immune from bad decision making.
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