Energy industry layoffs have begun and will accelerate North American drillers can only blame themselves for oversupply

In this photo made Monday, Dec. 22, 2014, a well pump works at sunset on a farm near Sweetwater, Texas. The industry is bracing for layoffs and budget cuts as oil prices fall and its largest investors pull back. (AP Photo/LM Otero) less In this photo made Monday, Dec. 22, 2014, a well pump works at sunset on a farm near Sweetwater, Texas. The industry is bracing for layoffs and budget cuts as oil prices fall and its largest investors pull ... more Photo: LM Otero, AP Photo: LM Otero, AP Image 1 of / 1 Caption Close Energy industry layoffs have begun and will accelerate 1 / 1 Back to Gallery

Just a few months ago I remember energy industry executives reassuring the public that the drop in crude oil prices would last only a short while and no one needed to worry about losing their jobs or an economic slowdown.

Unfortunately, you can't take billions of dollars every day out of any industry and not expect some pain, even from the big corporations with healthy balance sheets.

Apache is the latest to announce layoffs, cutting 250 employees or about 5 percent of its workforce. This comes after Halliburton announced 1,000 pink slips and BP said it would cut 200. Lewis Energy, a drilling company, is trimming its workforce 20 percent.

I've already begun to hear from people who think journalists are sowing panic by focusing on all of the negative news coming from the industry over low prices. Frankly, it reminds me of when I reported from Iraq in early 2004 and the Pentagon said my reporting on the insurgency was all wrong and the war was over. We know how that worked out.

Of course, the industry wants to blame anyone but themselves for the present downturn. More than a few insiders complain of OPEC's price war on shale. Such claims are ludicrous because OPEC hasn't done anything but stay the course.

OPEC countries are producing exactly the same amount of oil that they said they would and they are selling it for more than it costs them to produce it. If OPEC were flooding the market with more oil, or charging less than their production costs, then we'd have something to complain about, but that's not the case.

The current price drop is because North America is producing twice as much oil as it did a decade ago, and North American oil companies are now selling it for less than it cost to drill. Seems to me we have ourselves to blame, not anyone else.

No one wants to admit they've made a mistake, or to have their setbacks made public. But it's important to keep careful track of the industry that is so important to Houston. If writing about cuts in capital expenditures and layoffs creates anxiety for those whose lives depend on the industry, that's healthy.