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Oil prices are starting to come down from record highs, but they're still well above the prices from last year. In the oil-rich state of Texas, that can be bad news or good news, depending on who you are, as NPR's Wade Goodwyn reports from Dallas.
WADE GOODWYN, BYLINE: It's 3:45 in the Dallas afternoon. And Kevin Madden, a veteran painter for Lockheed Martin, is filling up his 2000 Honda at a QT gas station. I ask the slightly unfair question about what might be going on inside of him emotionally.
KEVIN MADDEN: I look down at the price, and as soon as I look down at the price, I get mad.
GOODWYN: At $4.10 for a gallon of regular unleaded, many listeners may well be thinking, what's he complaining about? But like many Texans, Madden drives plenty of miles every week.
MADDEN: It used to take me about $40 to fill it up, and then it's almost $70. That'll probably last about half a week. When I have budgets for everything else, now, all of a sudden, I have to have a budget for gas.
GOODWYN: As consumers pay higher amounts for a tank of gas, American oil companies are making amazing levels of profits. Companies like ExxonMobil, Chevron, BP, etc. have been enjoying between 5 and $6.2 billion a quarter. With Russian supply banned in the U.S., domestic production is stepping up. Through April and May, there was speculation that prices could actually be headed toward $150 a barrel. But then came a plethora of anxious rumination about the possibility of world economic recession. And higher gasoline prices began to reduce consumption, so the market reacted. For example, in early June, West Texas Intermediate Crude was selling around $120 a barrel. But at the start of this week, that price had dropped into the ballpark of $100 a barrel. On Friday, the price recovered a bit as the week came to a close. On that note, let's move the compass and talk Texas production.
TODD STAPLES: The Permian Basin today is looked at as one of the most productive and prolific oil and gas basins in the world.
GOODWYN: Todd Staples is the president of one of the most powerful lobbying organizations in the country, Texas Oil and Gas Association.
STAPLES: If Texas were its own country, Texas would be the world's third-largest producer of natural gas and the fourth-largest producer of oil.
GOODWYN: Staples says the best way to lower prices is simple - more gasoline.
STAPLES: The only real solution that will work is more production. We must increase supply to catch up with the increasing demand. We have men and women that can do this work. Texas is leading the way. Our rig count is up 65% today over a year ago.
GOODWYN: But when it comes to the availability of gasoline and diesel, it's not just about production at the well. The capacity of American oil refineries has long been an issue.
JOSHUA RHODES: We have a lack of refining capacity out there.
GOODWYN: Joshua Rhodes is a research associate at the University of Texas who specializes in the energy industry.
RHODES: What's different this time is there is more constraint in the refining sector than there has been in the past. And so even if we get more oil on the global market, it may not translate into lower finished petroleum products, like gasoline and diesel cost, as it would have in the past if we can't refine that oil into product.
(SOUNDBITE OF STARTING CAR)
GOODWYN: None of this is helping Dallas's Kevin Madden. He's standing by the gas hose, ignoring the price display as it tries to set speed records.
MADDEN: Yeah, I'm worried about it. I've got a younger daughter that's in school. I got to make sure I have money to take care of her also. It just make it hard on everybody.
GOODWYN: And as for the price of gasoline down the road, nobody knows for sure. But everyone's allowed to guess. Think happy thoughts as opposed to those nasty predictions back in April and May that we were headed toward $150 a barrel.
Wade Goodwyn, NPR News, Dallas. Transcript provided by NPR, Copyright NPR.
