With the first well drilled in 1925, the Permian Basin began its love-hate relationship with the oil and gas industry. It has since become what we are known for. It’s our livelihood. It’s who we are. It is the proverbial roller coaster we live to ride.
Over the last 5 years, the United States has experienced a revolution in hydraulic fracturing (fracking) and become a leader in crude oil production. However, the significant drop in oil prices has many confused as it seems global demand is relatively weak at the moment because of conflict stemming from every direction. Our area has been bombarded by articles and news stories from countless experts telling us how long low oil prices will last; to a point of sheer exhaustion. Some say we are doomed while others preach the gospel of a whirlwind comeback.
What we know is that oil prices were nearing $100 a barrel and went into a free fall of about $45 a barrel for West Texas crude late last year, and thousands of people lost their jobs. It was a bit shocking in that we were under the distinct impression fracking and horizontal drilling was the great American dream come true, and we were going to stay at our peak for a substantial amount of time. It appears Saudi Arabia had different plans. Their intent seems to be to put a halt on our successful fracking enterprise by continuing to pump 30 million barrels of oil per day despite the low price. Even though the U.S. had incredible success in the Bakken and Eagle Ford Shales, we continue to rely on OPEC oil.
Fracking is revolutionary and is leading the U.S. in a direction to possibly become a major exporter, but fracking is not cheap. Companies use complex technology to penetrate the densely packed layers of rock and drill horizontally then pump the formation with a mixture of water and proppants that allow the oil to seep out. In order to justify drilling shale rock to extract the apprehensive crude oil trying to hide deep in the surface, the price of oil needs to be high and OPEC isn’t budging. While consumers are enjoying the low gas prices, our economy is suffering at the same time.
The Permian Basin has seen the rise and fall of our economy on more than one occasion. Currently fear blows vehemently through the West Texas winds because, without warning, we were pelted by a dust cloud, swept up by a nasty dirt devil and forcefully thrown flat on our backs by declining oil prices. One day we were soaring through the clouds, and the next we were left like a deer in the headlights wondering what just hit us. Even though we have been here before, such a sudden and drastic drop was unexpected. Majors began laying people off, traffic became quieter, beautiful brand new apartments sat as empty shells while rigs started stacking up and out-of-towners headed back home. The desert has started to become eerily quiet… but not sad.
Those of us who call the Permian Basin area home… we wait. We wait because we know what lies ahead. We wait because we know we haven’t been left for dead; we are only resting for a minute. Our people take their pay-cuts and budget accordingly by eating bologna and ramen for awhile because we’ve been here before. We know that if we wait, there will be an oilfield resurrection. We are the lion that lurks on the horizon and will pounce with a vengeance. So we stay. We wait. We believe in ourselves and our community.
We don’t need experts with their sermons of impending doom to dampen our spirits. Around here, we are the experts. People of the Permian Basin have “oil smarts”. People who have been here for years already knew not to buy large equipment during the middle of a boom, nor did they buy fleets of shiny new trucks with payments spanning over 48 months. They knew that good times are not infinite and smart money decisions are what have always made them successful. Everyone should always have a back-up plan because we know oil goes up and down; it’s only a question of when.
Boom or Bust, the Permian Basin will always survive in order to thrive just like the beautiful forest of pump jacks on our orange and gold horizon.
This article was written by Stephanie Bordine from Odessa American, Texas and was legally licensed through the NewsCred publisher network.