Scarcity of pipe, rigs, and work crews continues to constrain petroleum drilling in the Southwest, according to an association of drillers, since many do not have permanent workers or established lines of supply. The association reports that the shortage of drilling rigs could be a problem for as long as three years because capacity constraints are limiting the ability of manufacturers to fill a growing backlog of orders.

The seasonally adjusted index of industrial production in Texas fell in November for the first time since July 1973. The decline was centered in mining of crude oil, petroleum refining, and production of petroleum-related chemicals. Despite intensified drilling, mining of crude oil has decreased because of the reduction of domestic reserves of crude. At the same time, shortages of crude oil have contributed to the reduction in refining activity, although in recent weeks imports have been greater than they were earlier anticipated to be. Unscheduled shutdowns for repairs and maintenance have also hampered refining.

A survey of manufacturers based in Texas indicates that many firms are taking action to stockpile petroleum or petroleum-related products. While many businesses complained about more limited supplies and rising prices, there is no evidence that petroleum or related products are unobtainable. Shortages were reported in plastics, solvents, and diesel fuel, but many manufacturers seemed just as concerned about the scarcity of nonpetroleum materials such as steel, copper, and aluminum.

At present, these manufacturers are not planning to cancel or even delay previously made plans to expand plant and equipment expenditures because of the energy situation. Of those contacted who had plans for significant investment in 1974, most are drawing up contingency plans in the event that the energy shortage becomes critically disruptive, but all seemed optimistic that the economy will remain sufficiently strong to warrant continuation of their capital spending programs in 1974.

New car registrations in the four largest metropolitan counties in Texas declined in November. The fall came in the wake of a substantial increase in October registrations-which has the result of filling large fleet orders placed earlier in the year. The November decline indicates the continuation of a cyclical downturn in Texas automobile sales which began last March.

Agriculture in the five District states had a record year in 1973 for crop production, income, and investment. Encouraged by strong demand and higher prices, farmers and ranchers are planning even greater production in 1974. However, they are seriously concerned that the necessary stocks of fuel and fertilizer may not be available to achieve this goal. Farmers in several major cotton- and grain-producing areas have reported difficulties in obtaining diesel fuel and complain that distributors are reluctant or unable to assure them of adequate fuel supplies for the approaching planting season. Local shortages of fertilizer have also been reported, and many cases have been noted where the price of fertilizer has doubled in the past year.