> During the 90s, oil prices were very low. It was generally credited as
> being a major factor in powering the US economic boom.
>
> So was the Texas oil economy in depression in the 90s? I don't remember
> ever hearing a thing about it. (Unlike in the 1980s, in a similar
> situation, where the discrepancy between the Reagan boom and the Texas oil
> fields depression was the stuff of Larry McMurtry novels.)
>
> What makes me even more curious is my impression that the Texas economy
> not only wasn't ailing, it was thriving. So is a super low oil price not
> the US domestic industry killer it's supposed to be, and seemingly used to
> be? And if so, how come?
>
To add to the explanations that Yoshie just posted, here is a sort of
half-baked, possible tangential thought:
There wasn't as causal a relationship between the 90s oil prices and the boom, as there was in the 80s.
For many oil companies, there was a mad scramble to diversify businesses during the 90s. This unleashed a record slew of mergers (i.e. Exxon-Mobil) which meant that fewer companies dominated the market which would in effect make up for any short fall in prices. Additionally, there was a series of holding company deregulation enabling companies that were involved in energy and oil but hadn't been state utilities (i.e. Enron) to transform their appearance.
In Texas, Enron, El Paso, Dynegy (aka Chevron-Texaco's child), Halliburton, etc. were expanding traditional business boundaries into commodities trading and other financial activities. They also entered completely new industries, like telecommunications-broadband. Most of the power energy companies, for instance, put down fiber optic networks alongside the beds of old pipelines to take advantage of the Internet boom.
Plus, hyper-inflated stock prices gave the appearance of corporate health before the revelations of systemic fraud and manipulation. Those discoveries, coupled with high debt ratios, have taken the diversified energy sector down in market value by 80-85% since its late 1990s highs.
Nomi
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