Wall St. Journal Takes Note of Gas Drop

The Wall Street Journal has taken note of the recent decline in energy prices and its effect on the local economy:

The torrid pace of oil and gas exploration pumped billions of dollars into regions such as North Texas, bringing stronger housing prices, lower unemployment and soaring tax revenue as drilling rigs rose in urban neighborhoods. Many residents benefited directly from royalty checks and land-lease payments that soared toward $30,000 an acre as recently as this summer.

"We were all sitting over here in a kind of blissful stupor enjoying a great market compared to the rest of the United States," said commercial-real-estate broker Jack Huff. "Until 30 days ago, there was no feeling at all that anything going on in the rest of the country affected us."

The Journal notes that the price of oil has fallen by more than half from its all-time high of $145.29 a barrel, while natural gas is off nearly half from its 52-week peak of $13.577 per million British thermal units, finishing Tuesday at $7.219 per million BTUs.

The economic gap between the Lone Star State and the rest of the country is narrowing. In August, the state's unemployment rate of 5.1% was a full percentage point better than the 6.1% national mark; that difference shrunk to 0.8 point in September at 5.2% versus 6.0% nationally. More specifically in Cowtown, the growth in sales-tax revenue has begun to slow, and unemployment is rising.

The bright side from the Journal:

Some in Fort Worth argue that even if gas production declines drastically, it has left the local economy in a better position to survive the broader national downturn. The city has saved much of its natural-gas windfall in a rainy-day fund, and has put the rest toward long-term capital projects that won't evaporate if drilling slows.