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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--One year ago, as West Texas Intermediate (WTI) prices peaked at $108 per barrel, finding oil was easy. But finding skilled workers was another matter. In oil-boom regions across the U.S., including Corpus Christi, Texas, the inability to hire enough truck drivers, welders and ironworkers was limiting companies' ability to produce Black Gold.
When crude oil prices collapsed in late 2014, there were dire predictions of a return to the late 1980s, the last time the oil prices cratered: domestic production would crater, companies would slash workers, and see-through buildings would return to Houston, Denver and other oil centers.
The doom-and-gloom predictions have not come to pass, at least not yet and not in Corpus Christi. As WTI prices have stabilized around $60 per barrel, roughly 45% below last year's peak, oil and gas production from the Eagle Ford region has dipped only slightly, according to the U.S. Energy Information Administration (EIA) (Washington, D.C.).
Click on the images at right to view crude oil and natural gas production levels in the Eagle Ford region.
"We know oil prices go up and down, so we didn't put all our eggs in one basket," said Ginny Cross, director of public relations at the Corpus Christi Chamber of Commerce, in an interview. "A year ago, oil and gas companies couldn't hire workers fast enough. Things were in a bubble. But we have billions of dollars of construction projects at our port, and a fair amount of that is manufacturing."
"Oil may be down, but natural gas is up," Cross said, referring to project activity surrounding construction of a multi-billion-dollar liquefied natural gas (LNG) export terminal complex in the area by Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas). Cheniere's stock has risen more than 2,300% in the last five years, as investors flocked to become part of the LNG export trend.
Industrial Info is tracking 63 active industrial projects in and around Corpus Christi valued at about $20.3 billion. Nearly $15 billion of that total is in the Oil & Gas Production Industry, which includes several Cheniere LNG projects, followed by Chemical Processing ($1.5 billion), Power ($1.2 billion), Petroleum Refining ($804 million) and Metals & Minerals ($756 million).
Cross discussed three large projects under construction in and around the Corpus Christi port:
Halliburton Corporation (NYSE:HAL) (Houston, Texas) and other oil-service companies, as well as exploration and production companies in the area, have reduced staffing, Cross told Industrial Info: "Downtown Corpus Christi has some see-through buildings, now that some oil executives have high-tailed it back to Houston." But many of those displaced workers found work in other manufacturing sites in the area, she added.
Unemployment is down in the Corpus Christi metropolitan statistical area (MSA) compared with a year ago, when the oil boom was in full swing, according to the Texas Workforce Commission (TWC) (Austin, Texas). Unemployment in the Corpus Christi MSA fell to 4.7% in May 2015, down from 5.1% in May 2014, TWC said June 19 in its monthly employment summary.
The mobility of the work force has helped cushion the economic blow from reduced oil and gas activity. But not all employers are expanding. At one time, the local U.S. Army base, the Corpus Christi Army Depot, employed about 6,000 people, but was losing highly skilled workers to the Oil & Gas Industry, Cross said. Unfortunately, the slowdown in oil and gas activity coincided with the base reducing its workers to about 4,000, so there are fewer jobs open there, Cross said.
As displaced oil and gas workers pursued their next job, however, they had to downsize their expectations for salaries outside the Oil Patch, Cross said: "Oil workers made really good money really fast, but opportunities outside that industry don't pay nearly as well. It's bittersweet, but it's not the end of the world."
"What we're seeing in Corpus Christi is another dimension of the shale-driven energy revolution," said Jesus Davis, Industrial Info's vice president of research for Oil & Gas Production, Pipelines and Terminals. "If you know how to weld or drive a truck, there's plenty of work in that area as businesses are taking advantage of low natural gas prices to build or expand their factories, or export the gas as LNG. One industry's pain is another's gain--that's the American way."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
When crude oil prices collapsed in late 2014, there were dire predictions of a return to the late 1980s, the last time the oil prices cratered: domestic production would crater, companies would slash workers, and see-through buildings would return to Houston, Denver and other oil centers.
The doom-and-gloom predictions have not come to pass, at least not yet and not in Corpus Christi. As WTI prices have stabilized around $60 per barrel, roughly 45% below last year's peak, oil and gas production from the Eagle Ford region has dipped only slightly, according to the U.S. Energy Information Administration (EIA) (Washington, D.C.).
Click on the images at right to view crude oil and natural gas production levels in the Eagle Ford region."We know oil prices go up and down, so we didn't put all our eggs in one basket," said Ginny Cross, director of public relations at the Corpus Christi Chamber of Commerce, in an interview. "A year ago, oil and gas companies couldn't hire workers fast enough. Things were in a bubble. But we have billions of dollars of construction projects at our port, and a fair amount of that is manufacturing."
"Oil may be down, but natural gas is up," Cross said, referring to project activity surrounding construction of a multi-billion-dollar liquefied natural gas (LNG) export terminal complex in the area by Cheniere Energy Incorporated (NYSE:LNG) (Houston, Texas). Cheniere's stock has risen more than 2,300% in the last five years, as investors flocked to become part of the LNG export trend.
Industrial Info is tracking 63 active industrial projects in and around Corpus Christi valued at about $20.3 billion. Nearly $15 billion of that total is in the Oil & Gas Production Industry, which includes several Cheniere LNG projects, followed by Chemical Processing ($1.5 billion), Power ($1.2 billion), Petroleum Refining ($804 million) and Metals & Minerals ($756 million).
Cross discussed three large projects under construction in and around the Corpus Christi port:
- TPCO Enterprise Incorporated (Gregory, Texas), a unit of Tianjin Pipe (Group) Corporation (Tianjin, China), together with its U.S. joint venture partners, is investing an estimated $1.1 billion to build a seamless steel pipe manufacturing plant in nearby Gregory, Texas. Both phases of the project, which have been under development since 2007, are expected to be brought online in early 2016. Constructing the 1.6 million-square-foot plant is providing construction jobs for an estimated 2,000 workers, the company estimated. When completed, the TPCO America facility will be the largest single investment by a Chinese company in a U.S. manufacturing facility.
- The Corpus Christi Direct Reduced Iron manufacturing facility, a $740 million project owned by a unit of Voestalpine AG (Linz, Austria), will produce 2 million tons per year of hot briquetted iron (HBI) using ore feedstock from Canada and Brazil. That plant is scheduled to be online by yearend 2015.
- The $300 million Corpus Christi Polymer Plant, owned by M&G Polymers (Corpus Christi), a unit of Gruppo Mossi & Ghisolfi (Milan, Italy), has been under construction since late 2014. When operating by yearend 2016, the grassroot plant will manufacture up to 2.2 billion pounds per year of polyethylene terephthalate (PET), a widely used resin in plastics.
Halliburton Corporation (NYSE:HAL) (Houston, Texas) and other oil-service companies, as well as exploration and production companies in the area, have reduced staffing, Cross told Industrial Info: "Downtown Corpus Christi has some see-through buildings, now that some oil executives have high-tailed it back to Houston." But many of those displaced workers found work in other manufacturing sites in the area, she added.
Unemployment is down in the Corpus Christi metropolitan statistical area (MSA) compared with a year ago, when the oil boom was in full swing, according to the Texas Workforce Commission (TWC) (Austin, Texas). Unemployment in the Corpus Christi MSA fell to 4.7% in May 2015, down from 5.1% in May 2014, TWC said June 19 in its monthly employment summary.
The mobility of the work force has helped cushion the economic blow from reduced oil and gas activity. But not all employers are expanding. At one time, the local U.S. Army base, the Corpus Christi Army Depot, employed about 6,000 people, but was losing highly skilled workers to the Oil & Gas Industry, Cross said. Unfortunately, the slowdown in oil and gas activity coincided with the base reducing its workers to about 4,000, so there are fewer jobs open there, Cross said.
As displaced oil and gas workers pursued their next job, however, they had to downsize their expectations for salaries outside the Oil Patch, Cross said: "Oil workers made really good money really fast, but opportunities outside that industry don't pay nearly as well. It's bittersweet, but it's not the end of the world."
"What we're seeing in Corpus Christi is another dimension of the shale-driven energy revolution," said Jesus Davis, Industrial Info's vice president of research for Oil & Gas Production, Pipelines and Terminals. "If you know how to weld or drive a truck, there's plenty of work in that area as businesses are taking advantage of low natural gas prices to build or expand their factories, or export the gas as LNG. One industry's pain is another's gain--that's the American way."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, five offices in North America and 10 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.
