Delivering his annual national, statewide and regional economic outlook Tuesday at the Marriott Hotel & Conference Center, Waco economist Ray Perryman said the wars in Israel and Ukraine have injected an element of uncertainty into the American energy industry, but the oil and natural gas reserves are so great in the Permian Basin and around the United States that the long-term outlook is nonetheless very positive.
Addressing 180 people at the SouthWest Bank-sponsored luncheon, Perryman reported that the Basin’s daily production has been around six million barrels of oil per day for the past three or four months, far exceeding the previous record of 2.1 mb/d in 1973, along with 24 million cubic feet per day or natural gas.
“These are phenomenal numbers,” said Perryman, who lives in Odessa. “There is a lot of wind and solar power, but that’s not a substitute.”
He said American liquefied natural gas has a great future with the needs in Sub-Saharan Africa, India and other areas. “We find ourselves in a unique position in the world,” he said.
“The question is, do have enough oil and gas to deal with it? I think so.”
The lively assemblage of prominent people in business and the professions in the hotel’s Devonian Room was welcomed by SouthWest Bank CEO Paul Weaver before the speaker was introduced by bank CEO-Emeritus Dewey Bryant, who quipped that Perryman’s abilities had become so respected that he “is being considered for the head football coaching job at Texas A&M.”
The closing was by bank President-COO Chris Cole and the invocation and benediction were given by the Rev. Ja’Vaun Johnson, the college and young adults pastor at Crossroads Odessa.
Reviewing national issues, Perryman said the U.S. “is facing significant challenges, but a major recession appears unlikely,” although the pace of growth has slowed and a downturn “with a soft landing” is possible.
“A major escalation in the Middle East could change the situation, making it more difficult to deal with inflation,” he said.
Turning to the local economy, Perryman said the Odessa Metropolitan Statistical Area “has been adding jobs at a notable pace over the past year, led by an expansion in the energy-related industries.
“Unemployment here is currently trending below state and national levels,” he said. “The Perryman Group’s latest forecast indicates that this upward trend will likely continue over the next five years, although the rate may vary with about 8,200 jobs to be added.”
Led by oil and gas and real estate, he said, real gross product should expand by 3.24 percent each year in Odessa and Ector County.
Perryman said the statewide economy is being affected by the national trends in inflation, higher interest rates and shortages of workers, but it has still been setting records for the past number of months with the size of its civilian labor force and the number of Texans employed.
“The state’s total non-farm employment has increased every month since the spring of 2021, when the economy began to normalize after the worst of the pandemic, and it’s now at almost 14 million,” he said.