How Can Your Railroad Construction Company Take Advantage Of Low Oil Prices?
If you are in the construction business and live in an area of the country renowned for its rich oil fields, you may be concerned about the recent dramatic dip in worldwide oil pricing, and wondering what is next. How will lower oil prices affect your local economy? Is there any way you can financially benefit from this economic lull, and -- if so -- how? Will investment in railroad infrastructure pay off, or are oil prices predicted to remain low forever? Read on to learn more about the ripple effects of lower oil prices for your community, as well as how you and your company may be able to take advantage of this dip in the cost of oil.
What will the decrease in oil prices mean for your local economy?
While many individuals cheer whenever the price at the gas pump dips, for those communities who rely on oil fields, equipment, and workers to keep the local economy afloat, these price swings can be painful. Some oil companies have already begun to lay off workers, while others predict that their equipment will remain "parked" until further notice.
Higher than average levels of unemployment and underemployment in a specific area can lead to increases in criminal activity, and even an increase in the number of individuals seeking government disability benefits. Although your province may extend unemployment benefits to continue to provide an income to those who have been affected by layoffs, these funds can't last forever.
Recently, many American and Canadian railroad construction companies have been expanding their reach to try to take advantage of the tremendous market made available by the expansion of the Bakken oil fields in North Dakota, shipping supplies and oil to and fro all across North America. Although the progress made on Bakken has slowed significantly with the drop in price and production of oil, there are still a few things you can do to help your company succeed during this time.
How can you take advantage of lower oil prices?
Railroads remain one of the most efficient (and safest) ways to transport oil from place to place. With governments reluctant to expand existing oil pipelines, it's likely that railroads will remain the primary mode of transportation for oil and its byproducts for the foreseeable future.
If you work in railroad construction or do other types of construction work, you and your company may be able to take advantage of these low prices by expanding your market. When fuel prices are down, the prices of other commodities goes down as well -- allowing you to perform the construction of a new railroad or expansion of an existing railroad for a much lower cost than normal, while still bidding an amount that will provide you and your business with a healthy profit.
Once oil prices recover, your company will already have the infrastructure in place to continue oil transportation, while giving you the flexibility to expand with increasing production. Rather than be forced to try to expand in response to increasing demand, you'll be able to take on new clients or customers while your competitors are still laying track (at higher prices).
What does the future of oil pricing look like?
Fortunately for those who are in areas experiencing mass layoffs, these low oil prices aren't predicted to last too long. Although drivers have been experiencing a reprieve at the gas pump for months, the decline in production will eventually result in fewer reserves available -- and as more and more consumers take advantage of these low gas prices by scheduling cross-country trips, demand will again rise.