Elections & Politics: The Oil Boom Goes Bust
The price of oil isn’t high enough to sustain all the operators that got into the business in the last several years, analysts say. Bankruptcies are becoming common. And Republican voters and Democratic caucus goers are busy in South Carolina and Nevada.
The Democratic primary election (well, it’s really a caucus) in Nevada today is an “urban vs. rural” contest, according to the Associated Press.
That shouldn’t make it much of a contest, since Nevada is one of the least rural states in the country. Only 5.8 percent of its population is rural, making it the third most urban state in the nation.
But, Nicholas Riccardi and Ken Thomas write, the way Nevada allocates delegates favors rural areas. So, in 2008, Barack Obama lost the popular vote in Nevada to Hillary Clinton, but he won the most delegates because he did better in rural areas.
In the day before Saturday’s caucuses, Clinton was in Las Vegas and her opponent, Bernie Sanders, was in northern Nevada.
Check the Yonder Sunday and Monday for full primary results from Nevada and the Republican contest in South Carolina.
The calls for “drill, baby, drill” have been replaced with “file, baby, file” as oil operations rush to file for bankruptcy.
The Minneapolis Star Tribune reports that as oil prices have fallen and North Dakota oil shale production has dipped, up to seven of the state’s 22 Bakken Shale oil drillers “are ripe for bankruptcy if oil prices continue to hover around $30 per barrel.”
Reporter David Shaffer writes:
The accounting firm Deloitte … projected that 35 percent of U.S. oil exploration companies — about 175 operators — are at high risk of slipping into bankruptcy this year. For the 18 months through December, 35 U.S. oil exploration companies with cumulative debt of $18 billion filed for bankruptcy protection, Deloitte said. That includes two Bakken operators.
Last month oil-industry analyst Fadel Gheit predicted that up to half America’s shale-oil producers could go bankrupt before things calm down.
This economic collapse is seen in the unemployment figures. The map with this Yonder tells the story. Unemployment rates are going up in the oil producing regions of North Dakota, Wyoming, Oklahoma, and Texas. A year ago, these were the areas with booming jobs numbers.
Good roundup here, in Iowa Farmer Today, of what ag people have to say about President Obama’s proposed budget.