The Federal Reserve Bank of Dallas says we're seeing something in the Texas Oil Patch that we haven't seen much of in the last couple of years--optimism.
News Radio 1200 WOAI reprots the quarterly Energy Survey shows bullish attitudes about drilling and the future of the state's oil and gas industry.
Senior economist Michael Plante says that's because many of the fracking companies which were stalled when OPEC suddenly boosted production and drove down the price of oil in an attempt to drive U.S. frackers out of business have now introduced enough efficiencies into their operations that they can make money with oil prices where they are today.
"In most of the major shale areas that are seeing drilling right now, their responses were almost always at $50 or below $50 as their break even point," Plante said.
He says that will largely short circuit OPEC's current effort to reduce production in hopes of driving prices back up."
They have definitely surprised in terms of just how efficient they can make their operations, and how low they can push the break even prices in some of the best areas where they are operating."Plante says two of the most efficient shale plays right now are in Texas, the Permian Basin and the Eagle Ford.
Many economists say, however, that the new efficiences in the oil industry in many cases mean operating with fewer workers, and many of the rigs which have emerged in recent months are largely or even completely operated by computer from a distant location.
That means that many of the estimated 100,000 jobs which have been lost in the Texas oil and gas industry will not return.
But Plante says for the companies, for the workers who are again signing on board with Eagle Ford producers, and for the communities and the state which reap the tax benefits of oil production, there are indications of a brighter future ahead.
"There was a particularly strong response this time around from the oilfield service companies, which have been benefitting from the new surge in drilling which has been happening recently," Plante said.