Time to assess diversification

Some say oil prices will rebound. Others say they've yet to reach bottom.

But, if prices for a barrel of crude stay under $40 for a while, how will Odessa do?

The Odessa Development Corp. has spent millions to bring companies here, and Gary Vest, economic development director for the Odessa Chamber of Commerce, is hoping it will pay off.

"I think we have considerably more diversification than we've had in previous downturns," he said.

Vest points to a number of projects, including the First American Home Buyers Protection Co. and Telvista customer service call centers, which employ hundreds of people.

Vest said the mortgage facility has been particularly beneficial to the economy while avoiding large amounts of job turnover.

"It's a great call center," he said. "It's really solid."

There's also the Family Dollar distribution center. While it experienced difficulty in hiring people when the oilfields were luring away workers, Vest said it's now near full employment of around 500. And it's the kind of business that can flourish while the nation is in a recession.

"A lot of people drop down to lower cost retail items - and that's their market," Vest said.

Other projects include Navasota Energy's Quail Run Energy Center, which recently added a second phase and has a third one planned. And Falcon International opened its Odessa facility in February.

The Falcon site, which is located in a 15,000 square foot building on West County Road, produces armored panels from composite materials to be used on U.S. Army helicopters. Ed Rose, Falcon president and chief executive officer, said the facility has had a good bit of interest from job applicants.

"We've been well received and we've had a lot of help," he said.

Though the Falcon plant has only 12 employees at this time, Rose said it brings a needed element to the community.

"(Diversification) is certainly important to long-term viability, but it's always important to have diversification and bring other things to the state of Texas," he said.

While he said the Permian Basin has done "a lot" to diversify the economy, economist Ray Perryman said there is even more that can be done, particularly in alternative energy.

"We have a lot of wind," he said recently. "We have a lot of sunshine. And we also have some great people who understand the energy industry."

Of course, in the current recession and credit crisis, there's no such thing as a safe bet, Perryman said.

"The whole idea of diversification is to get a lot of different things going on," he said. "Unfortunately, the (recession) we have going on right now is getting to have everybody spooked."

While projects like the uranium enrichment facility in Eunice, N.M. and the Waste Control Specialists radioactive dumpsite in Andrews County, are an hour's drive away, Vest said they still benefit the economy in Odessa.

Vest plans to continue to try to lure projects like Summit Power's $2.8 billion coal gasification power plant. And he sees positives for the future like some of the training Ector County Independent School District is doing.

But getting companies isn't easy.

"There's a lot of companies out there where you think, ‘Well, Odessa wants that company,' " Vest said. "Well so does every other city in the United States."

And, while he said he feels Odessa has diversified enough to make it through the current slump, Vest said there's still no question where the region's bread is buttered.

"Oil and gas is still the mainstay of our economy," he said. "So, naturally, we're going to feel every down cycle of crude oil."