{"id":22413,"date":"2015-01-08T06:15:17","date_gmt":"2015-01-08T12:15:17","guid":{"rendered":"http:\/\/stateimpact.npr.org\/oklahoma\/?p=22413"},"modified":"2015-01-08T09:45:16","modified_gmt":"2015-01-08T15:45:16","slug":"oil-field-workers-and-economists-in-oklahoma-hope-crashing-crude-prices-are-a-blip-not-a-bust","status":"publish","type":"post","link":"https:\/\/stateimpact.npr.org\/oklahoma\/2015\/01\/08\/oil-field-workers-and-economists-in-oklahoma-hope-crashing-crude-prices-are-a-blip-not-a-bust\/","title":{"rendered":"Oil-field Workers and Economists in Oklahoma Hope Crashing Crude Prices are a Blip, Not a Bust"},"content":{"rendered":"<div id=\"attachment_22414\"  class=\"wp-caption module image center\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-22414\" alt=\"Chad Igo owns Pecan Creek Catering, which delievers food to workers in the oil patch.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics071_WEB.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics071_WEB.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics071_WEB-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics071_WEB-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics071_WEB-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">Chad Igo owns Pecan Creek Catering in New Cordell, Okla., which delievers food to workers in the oil patch.<\/p>\n<\/div><p>The sign on the front door says \u201cclosed,\u201d but Pecan Creek Catering in New Cordell, Okla., is open for business. Out back, a tractor-trailer is being unloaded. Giant cans of green beans, tomatoes and mushrooms are hauled inside, where they\u2019re sorted and stacked on metal shelves.<\/p><p><iframe loading=\"lazy\" src=\"https:\/\/w.soundcloud.com\/player\/?url=https%3A\/\/api.soundcloud.com\/tracks\/185017399%3Fsecret_token%3Ds-QKSxx&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=false\" height=\"150\" width=\"100%\" frameborder=\"no\" scrolling=\"no\"><\/iframe><\/p><p><!--more-->In the kitchen, Jennifer Etris pours a carton of buttermilk into a giant bowl and stirs.<\/p><p>\u201cI cheat,\u201d she says. \u201cI use two of these ranch dressing mixes instead of one. It is known all over the world, my ranch dressing.\u201d<\/p><p>Etris makes her signature condiment in three-gallon batches. By the end of the week, it\u2019ll all be gone, devoured by teams of hungry roughnecks, frack crews, truck drivers and tool-pushers.<\/p><p>\u201cThey drive in, work their seven days, eight days, staying in a hotel. They want someone to come out and treat them like they\u2019re important,\u201d the business\u2019 owner Chad Igo says. \u201cA home-cooked meal. It\u2019s important to them. They don\u2019t want some greasy, nasty burger from town.\u201d<\/p><p>Pecan Creek used to be a caf\u00e9, but Igo closed the restaurant years ago to focus on catering, literally, to the oil field. The business grosses about a million dollars a year and employs about a dozen people.<\/p><p>\u201cLast year, we dumped $300,000 worth of payroll into Cordell, America, and that\u2019s something we\u2019re proud of,\u201d Igo says.<\/p>\n<p dir=\"ltr\">Oklahoma was the country\u2019s No. 5 crude producer in 2013, <a href=\"http:\/\/www.eia.gov\/todayinenergy\/detail.cfm?id=15631\">data<\/a> from the U.S. Energy Information Administration show. And as oil boomed, so, too, has the state\u2019s economy. The oil and gas industry employs tens of thousands of workers directly, but Igo\u2019s catering company \u2014 \u00a0like many non-petroleum businesses across the state \u2014 depends heavily on the energy sector. All told, roughly 20 percent of all jobs in Oklahoma are linked to the oil and gas industry, <a href=\"http:\/\/newsok.com\/oil-and-natural-gas-industry-supports-one-in-five-oklahoma-jobs-report-finds\/article\/5340761\">studies show<\/a>.<\/p>\n<div id=\"attachment_22415\"  class=\"wp-caption module image center\" style=\"max-width: 620px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-full wp-image-22415\" alt=\"Workers at Pecan Creek Catering in New Cordell, Okla.,unload crates, cans and boxes of food and prepare for catering jobs in oil fields in western parts of the state.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics064_WEB.jpg\" width=\"620\" height=\"413\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics064_WEB.jpg 620w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics064_WEB-500x333.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics064_WEB-150x100.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2015\/01\/20150106-pecan-creek-pics064_WEB-300x200.jpg 300w\" sizes=\"(max-width: 620px) 100vw, 620px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ StateImpact Oklahoma<\/p>\n<p class=\"wp-caption-text\">Workers at Pecan Creek Catering in New Cordell, Okla.,unload crates, cans and boxes of food and prepare for catering jobs in oil fields in western parts of the state.<\/p>\n<\/div>\n<h4>Price drop brings worries<\/h4><p>The plummeting price of crude oil \u2014 which recently sank below $50 a barrel, the lowest since 2009 \u2014 is alarming economists and state finance officials, who are projecting budget cuts and warning of potential job losses.<\/p><p>The crashing price of crude oil also casts a long shadow in Oklahoma\u2019s oil field. Some energy companies, like Continental Resources, <a href=\"http:\/\/www.houstonchronicle.com\/business\/energy\/article\/Continental-Resources-deepens-cuts-2015-budget-5974714.php\">are slashing<\/a> spending. Others are trying to weather what they hope will be a relatively short downturn. Workers in Oklahoma\u2019s oil patch, like Igo, are bracing for bad news as they face uncertainty.<\/p><p>\u201cWe\u2019re nervous, we don\u2019t know. I mean, $40 a barrel oil? They won\u2019t do it,\u201d he says. \u201cIt\u2019s going to catch up sooner or later, they will shut down.\u201d<\/p><p>In December, Gov. Mary Fallin and other top officials met to certify tax revenues for state budget planning. Right now, estimates show about $300 million \u2014 about 4.1 percent \u2014 less than last year, and low oil prices could make that gap larger.<\/p><p>The Board of Equalization will look at the numbers again in February to determine how much money the Legislature will have to fund state government. If oil prices stay low, agencies could face steep cuts.<\/p><p>Oklahoma lawmakers are <a href=\"http:\/\/www.tahlequahdailypress.com\/news\/state_news\/oklahoma-gop-leaders-warn-of-tough-budget-year\/article_b8489a4a-968e-11e4-b465-67c3fe284bec.html\">predicting<\/a> a \u201ctough budget year,\u201d while Preston Doerflinger, the state\u2019s secretary of Finance, Administration and Information Technology, and Treasurer Ken Miller <a href=\"http:\/\/www.foxbusiness.com\/markets\/2015\/01\/07\/state-treasurer-continued-low-oil-prices-will-start-dragging-down-oklahoma\/\">caution<\/a> that continued low oil prices could drag down nearly every tax revenue stream.<\/p><p>&#8220;We&#8217;re hoping that this will be a temporary, short-term drop in the price of a barrel of oil. But that&#8217;s hard to predict, so we&#8217;re being cautiously optimistic in planning,\u201d Gov. Fallin said after the December revenue meeting. \u201cThere might be a potential slump in the economy. And we don&#8217;t think it will be a big slump, but a possible slump.&#8221;<\/p>\n<div id=\"attachment_8484\"  class=\"wp-caption module image right\" style=\"max-width: 300px;\"><img decoding=\"async\" loading=\"lazy\" class=\"size-medium wp-image-8484\" alt=\"A Helmerich & Payne rises above the prairie near Geary, Okla.\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2012\/08\/HP-rig-300x218.jpg\" width=\"300\" height=\"218\" srcset=\"https:\/\/stateimpact.npr.org\/oklahoma\/files\/2012\/08\/HP-rig-300x218.jpg 300w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2012\/08\/HP-rig-500x364.jpg 500w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2012\/08\/HP-rig-150x109.jpg 150w, https:\/\/stateimpact.npr.org\/oklahoma\/files\/2012\/08\/HP-rig.jpg 620w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p class=\"wp-media-credit\">Joe Wertz \/ NPR StateImpact<\/p>\n<p class=\"wp-caption-text\">A Helmerich & Payne rises above the prairie near Geary, Okla.<\/p>\n<\/div>\n<h4>Fewer jobs, higher wages<\/h4><p>Economists like Mark Snead, president of RegionTrack, which provides economic forecasting and analysis for the Oklahoma Tax Commission, agree.<\/p><p>\u201cThe oil and gas industry is by far the largest single source of tax revenue to the state,\u201d Snead says.<\/p><p>That revenue includes severance taxes on oil and gas production, the corporate taxes energy companies pay, and income taxes paid by employees and royalty owners.<\/p><p>\u201cThe share of earnings of workers in the state from oil and gas is actually slightly higher today than it was in 1982,\u201d Snead says.<\/p><p>Right now, Snead is telling lawmakers to build the budget with $60-a-barrel oil in mind.<\/p><p>\u201cWe think this will continue to put downward pressure on the industry,\u201d he says, \u201cThe industry expected to steadily contract from this point going forward.\u201d<\/p><p>While Oklahoma\u2019s economy relies just as heavily on oil and gas as it did during the 1980s bust, Snead says the state isn\u2019t experiencing the same temporary population boom associated with drilling decades ago. Advances in horizontal drilling mean fewer wells and workers, but those comparatively fewer jobs come with much higher wages, he says.<\/p><p>\u201cIn the past, it was just about job creation, but what we\u2019ve seen in recent years is really about wealth creation,\u201d Snead says.<\/p><p>Lynn Gray, Economic Research and Analysis director of the Oklahoma Employment Security Commission, also expects layoffs and increasing unemployment, which he says will hit rural parts of the state particularly hard. And if high wage-earning oil industry workers lose their jobs \u2014 even in urban areas like Oklahoma City \u2014 they\u2019ll likely have a hard time finding comparative employment in non-oil sectors, Gray says.<\/p><p>\u201cI don\u2019t know if the other industries in the state would grow quickly enough to absorb those employees that were let go,\u201d he says.<\/p>\n<div class=\"related-content alignright\">\n<h4 class=\"related-header\">Related<\/h4>\n<div class=\"links\">\n<h5>Posts<\/h5>\n<ul>\n<li class=\"link\"><a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/2014\/12\/08\/how-low-oil-prices-could-block-an-oklahoma-tax-cut\/\">How Low Oil Prices Could Block an Oklahoma Tax Cut<\/a><\/li>\n<\/ul>\n<\/div>\n<div class=\"topics\">\n<h5>Topics<\/h5>\n<p class=\"topic\"><img class=\"alignleft\" src=\"http:\/\/stateimpact.npr.org\/oklahoma\/files\/2011\/12\/energy-state-60x60.jpg\" height=\"60\" width=\"60\" \/><a href=\"http:\/\/stateimpact.npr.org\/oklahoma\/topic\/energy-industry\/\">What Oil and Natural Gas Mean to Big-Energy Oklahoma<\/a><\/p>\n<\/div>\n<\/div>\n<h4>Looking down the road<\/h4><p>Back in the kitchen at Pecan Creek Catering, owner Chad Igo reviews his food order. Catering could be to the oil field what the canary is to the coal mine.<\/p><p>\u201cWe\u2019re kings when it\u2019s good. They love us,\u201d he says. \u201cBut as soon as it gets tight, we\u2019re the first one to get cut.\u201d<\/p><p>Despite the low oil prices and uncertainty, Pecan Creek\u2019s calendar is booked solid. Igo is still planning on buying a new trailer, and he bought property to expand his kitchen.<\/p><p>But Igo is diversifying. He also bought a building down the road in case he has to leave the oil field and get back in the restaurant business.<\/p><p>\u201cThat\u2019s the long game,\u201d Igo says. \u201cIt\u2019s the oil business. You always need to be planning the next thing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The plummeting price of crude oil \u2014 which recently sank below $50 a barrel, the lowest since 2009 \u2014 is alarming economists and state finance officials, who are projecting budget cuts and warning of potential job losses.<\/p>\n","protected":false},"author":36,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[490],"tags":[238,419],"acf":[],"_links":{"self":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/22413"}],"collection":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/comments?post=22413"}],"version-history":[{"count":21,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/22413\/revisions"}],"predecessor-version":[{"id":22435,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/posts\/22413\/revisions\/22435"}],"wp:attachment":[{"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/media?parent=22413"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/categories?post=22413"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stateimpact.npr.org\/oklahoma\/wp-json\/wp\/v2\/tags?post=22413"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}