(Bloomberg). — The Federal Reserve Bank of Dallas reports that oil drillers are facing record-breaking costs in their largest U.S. field. However, some banks have become less willing to lend money to this sector.   

The Dallas Fed released a Wednesday report that stated equipment, leasing, and other inputs costs for oil explorers, as well as contractors, rose to an all time high in the current quarter. The Eleventh Federal Reserve District, which includes Texas, parts of Louisiana, and New Mexico is seeing a decrease in lenders willing to lend to drillers.

“The political pressure forcing available capital away from the energy industry is a problem for everyone,” an unidentified survey respondent said. “Banks view lending to the energy industry as having a ‘political risk.’ The capital availability has moved down-market to family offices, etc., and it is drastically reducing the size and availability of commitments regardless of commodity prices.”

Meanwhile, supply-chain snarls are hindering efforts to replace diesel-burning pumps with cleaner, electric-powered gear in the Permian Basin, where components such as transformers are in “extremely short supply,” another respondent said.  

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