East Texas Oil and Gas Industry Re-Fueled - KLTV.com - Tyler, Longview, Jacksonville |ETX News

8/21/05-Smith County

East Texas Oil and Gas Industry Re-Fueled

The record high gas prices and energy costs at home may sound like bad news for many East Texans, but for some, the news is not so bad.

Those local, smaller producers in east Texas who suffered through oil and gas bust of the 80s are now seeing record profits. Profits they say are good for the economy in East Texas.

Oil and gas rigs and wells are costly investments for smaller East Texas producers like David Nelson and Preston Smith.

"It's risky and it's expensive," says Smith. "It's a tremendous amount of capital. The average well costs about a million and a half dollars."

They've kept with the business through the best and worst of times.

Nelson says, "Because the price of oil declined, the over all business declined, jobs were lost and people moved out of the area."

Smith adds, "We were all running on minimal margins and very low incentives to reinvest and now the pendulum has swung back and there's an opportunity for those of us in the oil industry and those who serve it. It's something that is needed for our country. You can't really starve an industry for 20 years."

With oil prices now more than $60 dollars a barrel and natural gas up too, your bills may be higher, but Gary Boyd with the Kilgore Economic Development Board says there are also some upsides for East Texans from jobs to taxes.

"It keeps your property taxes low," says Boyd. "Part of the real kick that East Texas is getting is our sales tax and ad valorum tax depending on the school district."

The local oil and gas companies are now hiring, as well.

"With the increased activity in the industry, there's thousands of new jobs that have been added in the past couple of years and these are good paying jobs," says Smith.

Boyd says, "We are seeing an influx of service and product companies who want to come here."

And they're expecting a trickle down effect in the East Texas economy.

"It's our convenience stores that are getting filled up with these guys going to work, it's our roads they are driving up and down and eating in our restaurants and staying in our hotels."

Though the East Texas economy is more diversified and not as dependent on "oil and gas" as it was during the 70s and 80s, the latest boom is helping re-fuel the local, smaller producers who survived the lean years.

Dana Dixon Reporting. ddixon@kltv.com

 

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