"Houston, You Have A Problem" - Texas Is Headed For A Recession Due To Oil Crash, JPM Warns

Tyler Durden's picture

It was back in August 2013, when there was nothing but clear skies ahead of the US shale industry that we asked "How Much Is Oil Supporting U.S. Employment Gains?" The answer we gave:

The American Petroleum Institute said last week the U.S. oil and natural gas sector was an engine driving job growth. Eight percent of the U.S. economy is supported by the energy sector, the industry's lobbying group said, up from the 7.7 percent recorded the last time the API examined the issue. The employment assessment came as the Energy Department said oil and gas production continued to make gains across the board. With the right energy policies in place, API said the economy could grow even more. But with oil and gas production already at record levels, the narrative over the jobs prospects may be failing on its own accord.... The API's report said each of the direct jobs in the oil and natural gas industry translated to 2.8 jobs in other sectors of the U.S. economy. That in turn translates to a total impact on U.S. gross domestic product of $1.2 trillion, the study found.

Two weeks ago we followed up with an article looking at "Jobs: Shale States vs Non-Shale States" in which we showed the following chart:

And added the following:

According to a new study, investments in oil and gas exploration and production generate substantial economic gains, as well as other benefits such as increased energy independence.  The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year, as well as more than 9.3 million permanent jobs across the nation. 



The ripple effects are everywhere. If you think about the role of oil in your life, it is not only the primary source of many of our fuels, but is also critical to our lubricants, chemicals, synthetic fibers, pharmaceuticals, plastics, and many other items we come into contact with every day. The industry supports almost 1.3 million jobs in manufacturing alone and is responsible for almost $1.2 trillion in annual gross domestic product. If you think about the law, accounting, and engineering firms that serve the industry, the pipe, drilling equipment, and other manufactured goods that it requires, and the large payrolls and their effects on consumer spending, you will begin to get a picture of the enormity of the industry.

Another way of visualizing the impact of the shale industry on the US economy comes courtesy of this chart from the Manhattan Institute which really needs no commentary:

The Institute had this commentary to add:

The jobs recovery since the 2008 recession has been the slowest of any post recession recovery in the U.S. since World War II. The number of people employed has yet to return to the 2007 level. The country has suffered a deeper and longer-lasting period of job loss than has followed any of the ten other recessions since 1945.


There has, however, been one employment bright spot: jobs in America’s oil & gas sector and related industries. Since 2003, more than 400,000 jobs have been created in the direct production of oil & gas and some 2 million more in indirect employment in industries such as transportation, construction, and information services associated with finding, transporting, and storing fuels from the new shale bounty.


In addition, America is seeing revitalized growth and jobs in previously stagnant sectors of the economy, from chemicals production and manufacturing to steel and even textiles because of access to lower cost and reliable energy.


The surge in American oil & gas production has become reasonably well-known; far less appreciated are two key features, which are the focus of this paper: the widespread geographic dispersion of the jobs created; and the fact that the majority of the jobs have been created not in the ranks of the Big Oil companies but in small businesses, even more widely dispersed.

Fast forward to today when we are about to learn that Newton's third law of Keynesian economics states that every boom, has an equal and opposite bust.

Which brings us to Texas, the one state that more than any other, has benefited over the past 5 years from the Shale miracle. And now with crude sinking by the day, it is time to unwind all those gains, and give back all those jobs. Did we mention: highly compensated, very well-paying jobs, not the restaurant, clerical, waiter, retail, part-time minimum-wage jobs the "recovery" has been flooded with.

Here is JPM's Michael Feroli explaining why Houston suddenly has a very big problem.

* * *

  • In less than five years Texas’ share of US oil production has gone from around 25% to over 40%
  • By some measures, the oil intensity of the Texas economy looks similar to what it was in the mid-1980s
  • The 1986 collapse in oil prices led to a painful regional recession in Texas
  • While the rest of the country looks to benefit from cheap oil, Texas could be headed for recession

The collapse in oil prices will create winners and losers, both globally and here in the US. While we expect the country, overall, will be a net beneficiary from falling oil prices, two states look like they will bear the brunt of the pain: North Dakota and Texas. Given its much larger size, the prospect of a recession in Texas could have some broader reverberations. 


By now, most people are familiar with the growth of the fossil fuel industry in places like Pennsylvania and Ohio. However, that has primarily been a natural gas story. The renaissance of US crude oil production has been much more concentrated: over 90% of the growth in the past five years has been in North Dakota and Texas; with Texas alone accounting for 67% of the increase in the nation’s crude output over that period.


In the first half of 1986, crude oil prices fell just over 50%. At the end of 1985, the unemployment rate in Texas was equal to that in the nation as a whole; at the end of 1986 it was 2.6%- points higher than the national rate. There are some reasons to think that it may not be as bad this time around, but there are even better reasons not to be complacent about the risk of a regional recession in Texas.




Geography of a boom


The well-known energy renaissance in the US has occurred in both the oil and natural gas sectors. Some states that are huge natural gas producers have limited oil production: Pennsylvania is the second largest gas producing state but 19th largest oil producer. The converse is also true: North Dakota is the second largest crude producer but 14th largest gas producer. However, most of the economic data as it relates to the energy sector, employment, GDP, etc, often lump together the oil and gas extraction industries. Yet oil prices have collapsed while natural gas prices have held fairly steady. To understand who is vulnerable to the decline in oil prices  specifically we turn to the EIA’s state-level crude oil production data.


The first point, mentioned at the outset, is that Texas, already a giant, has become a behemoth crude producer in the past few years, and now accounts for over 40% of US production. However, there are a few states for which oil is a relatively larger sector (as measured by crude production relative to Gross State Product): North Dakota, Alaska, Wyoming, and New Mexico. For two other states, Oklahoma and Montana, crude production is important, though somewhat less so than for Texas. Note, however, that these are all pretty small states: the four states where oil is more important to the local economy than Texas have a combined GSP that is only 16% of the Texas GSP. Finally, there is one large oil producer, California, which is dwarfed by such a huge economy that its oil intensity is actually below the national average, and we would expect it, like the country as a whole, to benefit from lower oil prices.


Texas-sized challenges


As discussed above, Texas is unique in the country as a huge economy and a huge oil producer. When thinking about the challenges facing the Texas economy in 2015 it may be useful, as a starting point, to begin with the oil price collapse of 1986. Then, like now, crude oil prices collapsed around 50% in the space of a few short months. As noted in the introduction, the labor market response was severe and swift, with the Texas unemployment rate rising 2.0%-points in the first three months of 1986 alone. Following the hit to the labor market, the real estate market suffered a longer, slower, burn, and by the end of 1988 Texas house prices were down over 14% from their peak in early 1986 (over the same period national house prices were up just over 14%). The last act of this tragedy was a banking crisis, as several hundred Texas banks failed, with peak failures occurring in 1988 and 1989.


How appropriate is it to compare the challenges Texas faces today to the ones they faced in 1986? The natural place to begin is by getting a sense of the relative energy industry intensity of Texas today versus 1986. Unfortunately, the GSP-by-industry data have a definitional break in 1997, but splicing the data would suggest a similar share of the oil and gas sector in Texas GSP now and in 1985: around 11%. Employment in the mining and logging sector (which, in Texas, is overwhelmingly dominated by the oil and gas sector) was around 3.7% in 1985 and is 2.7% now. This is consistent with a point we have been making in the national context: the oil and gas sector is very capital-intensive, and increasingly so. Even so, as the 1986 episode demonstrated, there do seem to be sizable multiplier effects on non-energy employment. Finally, there does not exist capital spending by state data, but at the national level we can see the flip side of the increasing capital intensive nature of energy: oil and gas related cap-ex was 0.58% of GDP in 4Q85, and is 0.98% of GDP now.


Given this, what is the case for arguing that this time is different, and the impact will be smaller than in 1986? One is that now, unlike in 1986, natural gas prices haven’t moved down in sympathy with crude oil prices, and the Texas recession in 1986 may have owed in part also to the decline in gas prices. Another is that, as noted above, the employment share is somewhat lower, and thus the income hit will be felt more by capital-holders – i.e. investors around the country and the world. Finally, unlike 1986, the energy industry is experiencing rapid technological gains, pushing down the energy extraction cost curve.


While these are all valid, they are not so strong as to signal smooth sailing for the Texas economy. Financially, oil is a fair bit more important than gas for Texas, both now and in 1986, with a dollar value two to three times as large. Moreover, while energy employment may be somewhat smaller now, we are not talking about night and day. The current share is about 3/4ths what it was in 1986. (Given the higher capital intensity, there are some reasons to think employment may be greater now in sectors outside the traditional oil and gas sectors, such as pipeline and heavy engineering construction).

As we weigh the evidence, we think Texas will, at the least, have a rough 2015 ahead, and is at risk of slipping into a regional recession. Such an outcome could bring with it the usual collateral damage that occurs in a slowdown. Housing markets have been hot in Texas. Although affordability in Texas looks good compared to the national average, it always does; compared to its own history, housing in some major Texas metro areas looks quite dear, suggesting a risk of a pull-back in the real estate market.


The national economy performed quite well in 1986, in spite of the Texas recession. We expect the US economy will perform well next year too , though some  regions – most notably Texas – could significantly underperform the national average.

* * *

So perhaps it is finally time to add that footnote to the "unambiguously good" qualified when pundits describe the oil crash: it may be good for everyone... except Texas which is about to enter a recession. And then Pennsylvania. And then North Dakota. And then Colorado. And then West Virginia. And then Alaska. And then Wyoming. And then Oklahoma. And then Montana, and so on, until finally we find just where the new equilibrium is following the exodus of hundreds of thousands of the best-paying jobs created during the "recovery" offset by minimum-wage waiters, bartenders, retail workers and temps.

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Latina Lover's picture

Double dip. The banksters screw Russia first.  Then they destroy the US oil and gas industry,  buy up their assets on the cheap, and force oil prices again. This is how things are done in a crony capitalist aka fascist society.

Truther's picture

Fuck the Fed..... Fuck the House of Saud..... And Fuck the EU.

That Peak Oil Guy's picture

In my mind, this is all due to escalating EROEI.  Oil prices were too high for the economy and the economy has adjusted, partially through substitution and partially through loss of other sectors of the economy.  The supply/demand equilibrium needs to be reached but in a market as huge and complex as oil and so many people on the planet this is not going to be a smooth process.  Add the money signal manipulation of the central banks and geo-political machinations of governments to the mix and it is hard to know what the true picture is.

All us peak oil types have been expecting "demand destruction" as part of the next stage in the big collapse.  Now the really interesting thing to watch will be what happens to prices in two or three years and what projects will be taken off line in that time period?

Looney's picture

Here’s an interesting piece of useless news.

Ukraine is considering George Soros to head the NBU (National Bank of Ukraine).

Another interesting name on the short list of five is (pull-up your diapers, boys and girls) Dominic Strauss Kahn!!!

I wonder who the other three “short-listers” are. Carl Icahn? Ken Lay? Charles Ponzi himself? ;-)


El Oregonian's picture

Que the "Desperate" phase...

The big, fat bloated two-ton tyrant, will now become even heavier and more difficult to roll off of you. Hopefully you won't be smothered during that process.

Stackers's picture

North Dakota will be hit hard. Boom town does not even come close to the real estate nonsense up there. Texas is much more diversified than it was in the 1980's. Lots of small to medium sized drillers and rig service companies will feel the brunt of the drilling slow down

WakeUpPeeeeeople's picture

There is no mention of how long the Saudis can continue to distort the supply of oil. Maybe a year, if that. Once they get hungry we are right back to $100 oil. If TX real estate does crash I for one will be buying the dip.

zerozulu's picture

I'm saying this for sometime now, something big is going to happen soon.

Manthong's picture

There will be plenty of work with all the new Obama immigration Taco stands.

James_Cole's picture

The interesting thing about that 'jobs in america' chart is after the financial crash the non-shale states have apparently had much better job growth. If you were to start the chart at '09 the shale states would look like shit respectively. 


The API's report... total impact on U.S. gross domestic product of $1.2 trillion, the study found.

The Perryman Group estimates that the industry as a whole generates an economic stimulus of almost $1.2 trillion in gross product each year


Almost like the biggest oil lobby is reading from the same script as the perryman group! How mysterious!

So what is the american petroleum institute after with all these 'studies' they and their comrades are publishing lately? A giant ass bailout perhaps??



The9thDoctor's picture

Crude is still TRIPLE what it was in the 1990s.

When crude hits $10 a barrel, then wake me back up.

Squid-puppets a-go-go's picture

yer maybe, but triggered derivatives wont wait a year to be called in

glenlloyd's picture

If this continues construction in ND will come to a halt and builders will follow pink slipped employees out the door. The overbuilt rental market in ND will founder as apartments cant be rented to the people left and property owners go belly up when the commercial mortgage can't be repaid.

Freddie's picture

Maybe Putin will give NovoRussia heroes Givi, Motorola and Mosgovi what they need to go to Kiev and kill the oligarch snakes.

Givi and Motorola have become youtube rockstars.


americanspirit's picture

Johnny Corzine is on his way to Kiev.

cossack55's picture

John Corzine


We Corzined some folks

Lumberjack's picture
Ukraine appeals to UN to resolve crisis in Crimea



Ukraine’s parliament has called on the United Nations to help resolve the crisis in Crimea as the region heads for a referendum on Sunday to secede from Ukraine and join Russia.

Ukrainian lawmakers adopted a resolution Thursday requesting an emergency special session of the UN Security Council in an appeal to the international community for what they say is a violation of international law by Moscow.

“We refer to the unprovoked act of aggression against Ukraine by Russia and its attempt to annex a part of the territory of a sovereign state,” said the resolution backed by 250 lawmakers, 24 over the required minimum of 226 votes.

Ukraine's parliament declared that under the principle of self-defense, acknowledged by the UN Charter, the country has a right to request help from other states or collective security organizations to restore its territorial integrity.

Any decision by the Security Council would be subject to approval by Russia, which, as an allied victor of World War II holds a permanent veto on the council.


The parliament of the majority Russian-speaking Crimea declared independence from Ukraine on Tuesday, adding in its statement that if the popular vote passes the country will become independent and will immediately request annexation by Moscow.

In Thursday’s resolution, Ukraine’s Supreme Rada said that despite attempts to resolve the conflict peacefully the situation in Crimea is deteriorating amid a flurry of activity by Russian military personnel operating in the country.

Troops lacking official insignia but carrying weapons and wearing uniforms used by the Russian military and understood to be under Russian command have taken control of military bases and key infrastructure on the peninsula in recent weeks.

Russian President Vladimir Putin denied the troops are Russian, calling them local militia.

Freddie's picture

Crisis?  The people of Crimea told the scummy gangsters in Kiev to go f**k themselves.  Just like the South told the North.

Eternal Complainer's picture

What about Corizine? Should his name be in the running?

Fuck Goldman Sachs of crap!

saints51's picture

Supply and demand for the oil industry is a big pile of bullshit. The major oil producers like OPEC can control supply anytime of the day at their will. They can create a surplus or deficit. Just like the peak oil propaganda- one big pile of bullshit to drive prices upwards just like it did. Now prices are falling and not a whimper about peak oil.

This oil price drop is about 2 issues: crush the shale industry and control non compliant countries.

spinone's picture

I don't think Peak Oil means what you think it means.

saints51's picture

Peak oil to me means we are at the top and can not climb higher with production. Hey I may be wrong and always willing to learn.

DutchR's picture

Good, here is what the world is running on (unless i missed somthing, mexico/north sea/brazil/venezuela easy) http://www.theoildrum.com/node/9263


And nobody tells what the real number is.







saints51's picture

Will check it out. Thanks

jerry_theking_lawler's picture

Yep. You have a 'flawed' concept of peak oil....there are multiple sources so please reread the concept and THEN report back.

Escrava Isaura's picture




The price is going low and lower because The Industrial Age is about to start its collapse….. Temporarily delayed by $20 dollars oil.


No nation has extra oil capacity, beside, maybe, Iran and United Arab Emirates.


Once The Industrial Age collapses starts, prepared for an exponential collapse…. 


Let me give you an example:

By Steven Kopits: Between 1984 and 2005 the world had a 25% oil surpluses. Since 2006, global oil production is declining.

From 2005 to 2013, the world spent $4 trillion dollars on upstream [not including pipelines, refinery, transportation, wholesale] exploration and production. And another $3.5 trillion dollars to maintain current legacy [fields]. Result: Oil production has fallen by 1 million barrels per day [mbpd].

For Comparison: Between 1998 and 2005, $1.5 trillion dollars spent added 8.6 mbpd.

To put into perspective: Germany GDP: $3.5 trillion dollars. So if you compare to 1998/2005 period, the world ‘vaporized’ the GDP of Germany on oil production. And the world still came up short 1 million barrels a day.

How challenging is the situation: 2014 Capex [upstream] Expenditures Trend: About $300 billion. Current forecast Capex: $193 billion. Over 30% decline. Shell, 2nd largest oil company in the world, not only cut capex by 20% but, since 2013, it has been borrowing money to pay dividends.




By the way: My first job was for Zapata Marine Service, in Brazil.


saints51's picture

I +1 ya but what if production is declining as indicated by your example due to more people are unemployed? The jobs are not their so the individual may not have vehicles to fuel. We know for a fact that the unemployed numbers released by .gov are bullshit in the US. Europe and Japan are in the same boat.

Escrava Isaura's picture




We bloggers build elaborate theoretical models not better than our current economic models.


We bloggers pay little attention that “Money-Power” won’t go away. That there is NO more growth, besides running government deficit and monetary policy (free money, otherwise people will go jobless and hungry).


We do not study the railroad bubbles. To this day, most don’t understand that deregulation led to the 30’s Great Depression. Heck. Most people still think that subprime led to 2008 financial meltdown.


We won't see Hyperinflation this decade. We will see is less and less purchasing power.


There won’t be Hyperdeflation. You will see QE for the lucky ones and Bread and Circuses for the masses.


Of course, there will be a break point: When there won’t be enough energy for everyone. The QE people will afford it.


So the question left to answer is: When will the Bread and Circuses flow to the streets?


I believe America, and the dollar, will be the safest place to be at the beginning of the meltdown (2019). Then, America will become the least prepared place to be (2025).



“This obliteration of “false hopes,” requires an intellectual knowledge and an emotional knowledge. The first is attainable. The second, because it means that those we love, including our children, are almost certainly doomed to insecurity, misery and suffering within a few decades, if not a few years, is much harder to acquire.” – Chris Hedges


saints51's picture

Well to the poster below that is complete fucking bullshit propaganda from a source like cnbc. I look around my state and see hardly any solar,wind or other form of overprice and deliberate low tech alternative energy. Celebrities and other liberals drive a prius but nobody else. Those dumb fucks do not realize all the petroleum products in their electric cars.

@Escrava - You said no more growth. I agree with you. There is no more growth and people are losing jobs which in my opinion is why oil price is going down due to lack of demand of fuel. You need wars for the price to increase again. And that war must start in an OPEC nation to use the main stream media for reporting major oil disruptions which will be total bullshit.

petkovplamen's picture

to Escrava Isaura


Fine anaysis but you are ignoring history. The meltown won't be allowed to happen. Just like there were 2 tiems during the 20th centiory when the meltdown was stopped via a world war, this meltodwn will be stopepd with a war on the Eurpean continent. And I can even predict when this war will start: spring 2015. By summer 2015 NATO will be attacking Russia.

Escrava Isaura's picture



First: I am not ignoring history; and I am not ignoring our reality

Second: There will be a WW-3 ‘Starting’ before US economic meltdown that I have for 2016. So, I will go with yours 2015 date.


Keep in mind: US will need trillions of trillions of dollars yearly to sustain their lifestyle and over 20 million barrels a day of oil. US elites know that those are impossible tasks to achieve.

I live in DC and the people here that are starting realizing our precarious situation are scare to death.

So, a US perfect scenery is a war in Europe, and against Russia. As well as a revolution in China. NOTE: This war CAN NOT come to America soil, because it will turn into a nuclear war.


The US financial and commercial collapse, as well as political and social meltdown will happen. And it will go globally. I have all four by 2027. US will be blaming the war and the world by implementing a global currency for their collapse.




Growth is over. Next war will be the nail on the coffin.


Humanity will be facing our final decline. We are going back to the 16th century. You and I, like it, or not.



"I don't know (how WW-3 will be fought). But I can tell you what they'll use in the fourth. They'll use rocks!" – Albert Einstein


MEFOBILLS's picture

Humans are pretty creative.  For example, we could use the cyclone engine which uses supercritical steam.  We could fuel this engine for a long time using coal dust.  




Also as technology moves forward, we will create bioorganisms that can make ethanol, probably out of celluosic hardwoods.    It is not beyond the realm of possiblilty that we will create more advanced fuel cells and cheaper methods of hyrdogen production.  


Yes, we are a species that is energy dependent.  But, even more critical is the usury issue that demands ever more from futurity as increasing debts to pay debts from the past.  

Get rid of the usury and we can build highly insulated homes (no more paying bankers the extra 200K or so on a home loan - instead we build good homes.)  Get rid of private banker directed economies and we can vector our labor energy into being more sustainable on the planet.

So, it is a crap shoot as to whether or not we can shake off the banker parasites and their banker credit money system.  If we can, then we will be able to direct our future politically rather than at the behest of an unelected psychotic pathological group caught in the grip of diabolical Kaballah and Zohar mysticism. 

JohninMK's picture

Oli consumption has been gradually falling in the West due to substitution (gas and wind and solar), more insulation, more vehicle economy and lower mileage. Not a lot to do with unemployment, mainly its the gas impact where oil has become much more expensive than gas over the past 10 years.

Escrava Isaura's picture




Sorry, your post is not correct.


First: Wind and solar takes oil. Wind and Solar are not substitute for oil. There ARE NO substitutes for oil.

Second: Natural gas only counts for about 3% of transportation in the US.

Third: Largest increases happened on Ethanol and Biodiesel. Both counts for 4% of the transportation. But, ethanol is heavily dependent on oil. And most of biodiesel is recycled diesel, which is oil to begin with.





Without boring you too much; and because I have posted this before:

US gasoline 2007

Produced: 3.3 billion barrels

Imported: 173 million barrels

Exported: 1.5 million barrels

US gasoline 2013

Produced: 3.2 billion barrels

Imported: 16.1 million barrels

Exported: 4.4 million barrels





Conventional Oil

Consumption 2006: 21.7 million barrels a day

Consumption 2014: 18.4 million barrels a day




Produced 2006: 5.1 million barrels a day

Produced 2014: 7.4 million barrels a day



Unconventional Oil

Shale 2014: 3.3 million barrels a day



Other Liquids

Palm oil, ethanol and other biofuels came to 2,354,000 barrels per day

Note: These are mostly produced outside of the USA




AssFire's picture

I upvoted you, but now feel like I need to take a shower.

sun tzu's picture

Do you think you can get OPEC mambers to agree? The Arab states are in a war with the rest of the OPEC producers. The Iranians and Venezuelans are taking it up the ass with lower oil prices while the Kuwaitis and Saudis are laughing.

Oilwatcher's picture

You make some good points but need to let go of the "peak oil" idea ... substitution, drastically increased efficiency of energy use, and technological development are why peak oil has been just around the corner for nearly 150 years now ... the only thing that might really result in peak oil is the massive poliical distortion (perhaps obliteration is  better word) of valid market signals by the fed and others, together with the economc suicide of states like New York that refuse to develop the riches under their own feet to please the green religious beliefs of Manhattan elites.

Omen IV's picture

"economc suicide of states like New York that refuse to develop the riches under their own feet to please the green religious beliefs of Manhattan elites."

ace im no green but i dont want that shit operation in NY - the water shed is worth more to me -i can pay more for gasoline - screw the money

fuck up Iraq, TX and SD -

Urban Roman's picture

I have a little list ... they'll none of them be missed.

Stoploss's picture

Mr. Putin:

Any time your ready to blow the Saudi's off the map.

GREEN LIGHT...............

Amerikan Patriot's picture

Vlad's back-up plan is to fart real loud.  Or possibly to judo-flip a few flacid, compliant men to the mat.

There's a list where you can sign up to be one of those men.

IndyPat's picture

Sorry Bob. Calling your dumbass out. I've been watching you, Bob.

You've been posting MSM/Bankster drivel on here since you got your acct here a few weeks ago.

Suddenly, you see a piece about AN IMPENDING TEXAS economic disaster, and you still see this as ammo for your anti Putin Bankster shilling?

Sorry, Bob. Somewhere high on the Russian plains, a shirtless man is riding a tiger and laughing at the west. We set a fire that burned our own house down. That's not even checkers, Bob.

You are the absolute weakest troll I've ever seen here, Bob.

noben's picture

May be bad for US Fracking sector, but cheaper energy is good for everyone else.  Ask the Texas farmers is they hate paying less for gas, diesel and perhaps fertilizer.  Or anything else made from oil (plastics...).  Or those who are concerned about their ground water.

Sure, Russia may be a big part of it, but it's not the only part, IMO.  Could also be the Saudis fighting for market share.  Or both.  I do not buy the "Lower Demand" pretext, because if Demand is down, you simply pump less, not more.  Anyone who uses the Demand reason, is uninformed or a shill.

TheReplacement's picture

There are many knock-on affects.

'So Guvna Perry, your state, Texas, has absolutely collapsed economically in the past year and a half.  Every single economic metric is showing bright red - wages are down, unemployment is way, WAY up, the housing market is awful, you get the picture.  If you are elected President how do you expect the voters to believe you won't destroy the economy of the whole country in a similar fashion?'

It make a great narrative.