The price of gas has dropped $2.38 per gallon since it reached a record high in July. And some experts believe we could see gas as low $1.00 a gallon soon. But are cheap prices having a bad effect on the East Texas economy? As KLTV 7's Courtney Lane explains, some parts of our economy are suffering from it.
What a way to start the new year with these falling prices. Economists say Americans will save over $100 billion in 2009, if the pattern continues. For the average household, that's quite a savings.
"To put it in perspective, that is about $5,000 or $6,000 per family, and that is hugely significant," said Joe Petrowsky, CEO of Gulf Oil.
But for energy-producing states like Texas, there is a down side.
"It's really dampened our Texas and regional economy," said Tom Mullins with the Tyler Economic Development Council.
Mullins said low demand and cheap prices at the pump equal a drop in exploration in the oil and gas industry.
"Companies will not take a chance on drilling and exploring for oil and gas when the prices are at a lower level because they can't get a return on it."
So for East Texans who work in the field, it may be harder right now to provide for their families.
"There are fewer land men required, there are fewer people working on rigs, there are fewer people working in the service sector."
Mullins said East Texas had been in a bubble, but about 2 months ago he said the national economic troubles started seeping into our region.
"We already knew about the housing problems and all the problems in the auto industry and other manufacturers. And that ripple effect is starting to come into Texas now because we're not being shielded anymore by the high price of oil. That's dropped and now we're more tied to the national, global markets," Mullins said.
But providing some protection in East Texas is our thriving medical field, Mullins said. So is retail, education, and some technical fields, which are growing as well.