Permian Basin Oil Production Is Declining- What Does This Mean For Lubbock?

According to Reuters, the Permian Basin oil "boom" is gradually tapering off, due to various factors. Between China making a major move toward electric vehicles and prime wells going dry, that economic powerhouse simply won't last forever.

This could eventually spell disaster for the Midland/ Odessa area, as nearly a third of all jobs in the area are energy-related, according to the Federal Reserve Bank of Dallas. It is not a huge mental leap to consider how many service industry jobs would also evaporate if that workforce were to disappear.

If Midland/ Odessa Goes Dry, Would That Affect Lubbock?

Lubbock would almost certainly feel a small but painful pinch if the Permian were to go ghost town. There's no way to know exact numbers, but we all know that some folks from that area visit Lubbock for entertainment and to see family.

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Existentially speaking, the Basin always represented a way out, too.

I have heard countless young men in my life say, "At least I could work in the oil field," and send the money back to their families in Lubbock. Or work and save in Midland/ Odessa to create a nest egg for a life in Lubbock. It was also a good "second chance" job for people with a more complicated past.

The Permian Going Dry Would Affect The Entire U.S.

This is the more concerning issue- beyond Lubbock and beyond Texas. The Permian is so important that going dry would affect the entire U.S. This is because the Permian Basin now accounts for 30% of U.S. crude oil production, thanks to innovations like fracking, which make the area more productive.

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However, drilling in the basin is expensive, and wells can be a bit of a gamble. No one wants to break even or even lose on a well. As prime wells go dry, the pickings get slimmer, and fewer investors want to spend (and create jobs) on what might be a lukewarm return.

Is The Permian Basin Going Dry Soon?

Not really. This isn't a Mad Max-esque problem that's right around the corner. It's more of an economic snag for the area. When you are accustomed to boom, stable feels like hardship. And that's where the Basin will likely be for still years to come, just stable, like other U.S. oil basins, according to Goehring & Rozencwajg, a natural resource investment group.

Any change to Lubbock thanks to a lack of a boom in Midland/ Odessa may be so gradual that we as individuals don't realize it, but losing billions in oil money in our state will change lives unless something else comes along to replace it.