When the demand is low and the supply is high, prices go down; that’s the rule of supply and demand. Currently, that is exactly what’s happening in the oil industry.
On the contrary, the Permian Basin continues to produce nearly half of the United States oil production, even with the price of the barrel fluctuating around $50.
The chair of Texas Tech University’s Petroleum Engineering department, Dr. Marshall Watson said, “The U.S. produces roughly 11 to 12 million barrels of oil a day, of which roughly 4 million comes from the Permian Basin.”
He said that makes the Permian Basin the most active in the entire world.
“Half the rigs running in the world are running in the U.S., well more than half of those rigs running in the U.S. are working in Texas, and well more than half the rigs working in Texas are working here in the Permian Basin,” Watson explains.
He said it’s this steady production and the fact that Lubbock is only a 2 hour drive from the Permian Basin, that may lead to an increase in families moving to Lubbock and commuting to the Permian Basin for work.
“I see Lubbock benefiting from that, because there’s going to be overflow and the most logical place and the place where people would like to go, in just talking with people, is Lubbock,” Watson said.
He said he’s lived in both Midland and Lubbock and due to Lubbock’s growing economy, arts and entertainment options, it makes it more attractive for industry workers and their families.
“The arts, sports, I mean you name it Lubbock has a huge advantage over Midland, just simply shopping and eating out,” Watson said.
But, when it comes to Texas Tech, it’s quite the opposite affect; specifically in the petroleum engineering department.
“We get a lot of students from the Permian Basin in petroleum engineering,” Watson said. “But moreover, the population of students in the department is driven by oil price. And oil price drives the number of jobs.”
Therefore, he said he’s seeing a decline in the number of students enrolled in the petroleum engineering department. But, he said he continues to see Texas Tech engineers of other areas, become employees at a number of oil and gas companies in the Permian Basin.
