The recent increase in energy prices is kindling activity in the oilfields, which is good for the local economy. But that adds pressure on inflation as consumers and businesses wrangle for the same goods.
At Christmas in Action, a nonprofit that repairs homes for primarily elderly owners, water heaters have doubled in price in the past year along with lumber and siding. The group had to dig into reserves for the first time in its 50-year history, said Nathan Knowles, director of operations.
“When prices make a big jump like this, they just don’t come back down,” Knowles said. Meanwhile, demand is only picking up as more homeowners call with a caved-in roof or rotted wall and simply don’t have the cash for repairs.
Signs of future inflation are evident in the service sector, too.
Medical Center Health System, the largest health-care provider in the region, currently has about 100 nurse positions open. Two people have applied. That means hiring more contract nurses, whose agencies charge $280 an hour — about eight times what a local nurse makes. Prices for protective equipment have also surged.
So far, Medical Center Health System has held off on raising procedure prices and relied on telehealth and bulk ordering to keep costs low. Come October, the provider will ask insurers to reimburse more for procedures, said President Russell Tippin. Patients are already seeing higher premiums and co-pays.
Tippin, who was named into his role just before the pandemic, is used to the boom-bust nature of a city reliant on the energy industry. This is different.
“The only thing I know is that it will go up and if it goes up, it’ll come down. But this is the first time I’ve doubted that,” he said. “West Texas is experiencing double inflation — oil inflation and then the inflation of gas and milk and everything else.”
The soaring costs of basic goods have brought more people each Wednesday to the West Texas Food Bank in Odessa, Midland’s sister city about 20 minutes away along Interstate-20.
Since January, the line of cars snaking outside the three-story warehouse facility has grown longer. The count from one April afternoon: 420, the most since the worst of the Covid crisis in 2020.
Jesus and Nativia Zepda were in that line, their van’s gas meter flashing empty and still a 30-minute wait from volunteers handing out boxes filled with watermelon, bread and canned vegetables.
“The only food I can buy at the grocery store anymore is eggs and beans,” said Jesus, 74, who retired five years ago. The couple receives about $2,000 a month in pension and benefits, but only in the past few months have costs driven them to the food bank.
Behind them in line was Eduardo Gama, 47, his sedan windows rolled down for his three big dogs. Rent and electricity prices shot up so much in Midland that a few months ago he moved to an RV park in Odessa. His monthly bills are down $200, but wages from his job at a storage facility haven’t kept pace with inflation.