Falling oil prices cause job losses in Pine Belt - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Falling oil prices cause job losses in Pine Belt

Prices at the pump continue to fall Prices at the pump continue to fall
LAUREL, MS (WDAM) -

While drivers across the country and in Mississippi are enjoying lower gas prices at the pump, a Laurel company said the drop in oil prices is cutting jobs in the Pine Belt.

"I'm glad for people to get those savings, but at the end of the day, the actual oil and gas producer, they're the ones that are taking a hit," said Nick Welch, President of Eastern Fishing and Rental Tools. "We you see $30 oil, the people that are purchasing the gas at the pump are paying $1.40, $1.50, $1.60, the capital expenditures for oil companies, they've cut them back. That means less work for us. You're talking about drilling rigs that are being stacked. Workover operations that are being shut down. Oil and gas companies are slashing their capital spending. All that impacts the Pine Belt, impacts oil and gas service companies, impacts our sales tax in the state of Mississippi from the revenue sources."

Welch said the drop in crude oil prices does not only mean less money for big oil producing company, but said the revenue loss can be felt in Mississippi. 

"From 2014 to 2015, our revenue has been reduced by 40 to 50 percent," he said. "When you equate that to companies in the Pine Belt area for sales tax for the state of Mississippi, that's a large impact."

He said it is also impacted employment in the oil and gas industry in the Pine Belt.

"We've had 21 companies in the Laurel and Jones County area go out of business in the last 14 months," Welch said. "That's equated to somewhere between 1,200 and 1,400 direct jobs. When you start talking about indirect jobs, you know, restaurants, convenience stores, retail spending, I'm sure that's a large number too."

Nationally, Welch said he has seen estimates that 250,000 people working in the oil and gas industry have lost their jobs.

He said ripple effects of oil price fluctuation can be felt well beyond the gas pump, and even in your own home.

"Energy touches everything," he said. "It touches your electric bill at your house. It touches your gas bill at your house. I mean, your roofing products, construction products, so it has a large impact for those areas in the marketplace also. It's serious."

Copyright 2016 WDAM. All rights reserved.

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