Though Prices Aren't As High As Before, West Texas Enjoys Oil Revival
DAVID GREENE, HOST:
The United States is now producing 10 million barrels of crude oil a day. The last time that happened...
(SOUNDBITE OF NORMAN GREENBAUM SONG, "SPIRIT IN THE SKY")
GREENE: Yes, that is the sound telling us it was 1970. For decades, few expected such a comeback in oil. Mose Buchele of member station KUT traveled to the heart of the oil boom - West Texas - to find out how we got here.
MOSE BUCHELE, BYLINE: Here in downtown Midland, there's a big LED that flashes the price of a barrel of oil.
It bounces around. And in those changes, you can read the story of oil in America.
KIRK EDWARDS: We here in Midland-Odessa, we know these ups and downs.
BUCHELE: The offices for Kirk Edwards' company Latigo Petroleum is a quick drive from that flashing sign. He says four years ago, when it showed prices over a hundred dollars a barrel, rigs were going up everywhere. Drillers were making crazy money. Then came the crash, courtesy of the Organization of Petroleum Exporting Countries.
EDWARDS: OPEC was trying their best just to slam the door on what was going on out here by flooding the oil markets, and they did a phenomenal job.
BUCHELE: So much oil hit the market, the price of a barrel dropped into the 20s.
EDWARDS: Nobody can make any money at that.
BUCHELE: Companies went bankrupt.
EDWARDS: Everybody quit drilling.
BUCHELE: Hundreds of thousands lost their jobs across the country.
EDWARDS: Everybody quit working.
BUCHELE: Here in Midland, laid-off workers abandoned cars at the airport as they flew back home. People started to wonder if the good times would ever come back. But they did, even though the price of oil is nowhere near that old high.
(SOUNDBITE OF FRACKING)
TOMMY TAYLOR: It's pretty loud.
BUCHELE: These days, the flat, khaki-colored plains around Midland are crowded with rigs and pump jacks. Tommy Taylor from the company Fasken Oil and Ranch shows me some of the technology that's making all of this possible. We're at a fracking operation where they inject water, sand and chemicals into the earth to separate oil from rock.
TAYLOR: Right here and right here, you can see the pumps going back and forth. They're energizing that fluid every stroke.
BUCHELE: Operations like this were forced to become faster and cheaper during the downturn. Subcontractors, of which there are many in the oil field, started charging less to stay in business. And technology improved.
(SOUNDBITE OF DOOR CLOSING)
BUCHELE: Taylor leads me into an air-conditioned control center called a frack van, where men sit at computers, monitoring information coming out of the well.
TAYLOR: We used to frack jobs on the tailgate of a pickup, and you were standing out there whether it was hot or cold or raining or snowing. And so we've come a long ways.
BUCHELE: All these advances make drilling more profitable even when the price of a barrel of oil isn't that high. Plus, companies can get more oil than they used to by drilling down, then horizontally underground, sometimes for miles. Drillers say they're able to suck up more oil with one well than they used to with four.
TAYLOR: So there's oil and gas in the ground that we never thought we would be able to access. And the techniques that we use have brought it to the forefront today, and it's just phenomenal that we're able to do that.
BUCHELE: Of course, that wouldn't matter if prices had stayed too low to turn a profit. They didn't. In 2016, OPEC reversed course, and oil crept back up.
JIM HENRY: Highs are better than lows (laughter). It's a high now (laughter).
BUCHELE: I met Jim Henry, CEO of Henry Resources, at the Midland Petroleum Club, where he was about to enjoy a nice filet mignon.
HENRY: We're having a lot of fun. Everybody's making money.
BUCHELE: But, he says, America's new position as oil king won't stop the boom-bust cycle. In fact, he thinks this massive amount of production might even accelerate the industry's highs and lows.
HENRY: And it's going to be hard to keep up with it.
BUCHELE: But for now, production numbers are only expected to go up. By the end of next year, energy analysts believe the U.S. will surpass Saudi Arabia and Russia, becoming the largest producer of crude oil in the world. For NPR News, I'm Mose Buchele in Midland, Texas. Transcript provided by NPR, Copyright NPR.