Plunging Oil Prices Deliver A Gut Punch To One Texas County Oil companies have slashed production across West Texas and southeast New Mexico, where communities are also hurting from pandemic-driven business shutdowns.
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Historic Oil Bust Delivers A Gut Punch To A High-Flying Texas County

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Historic Oil Bust Delivers A Gut Punch To A High-Flying Texas County

Historic Oil Bust Delivers A Gut Punch To A High-Flying Texas County

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STEVE INSKEEP, HOST:

People in the oil business are familiar with the cycle of boom and bust - prices soar. Prices plunge. But they've never seen anything like 2020, when the pandemic abruptly brought prices to record lows, even below zero. NPR's John Burnett reports from the Permian Basin, the heart of oil country in West Texas.

JOHN BURNETT, BYLINE: On a normal day in Andrews County, look in any direction, and, stretching to the horizon, you'll see the bobbing horse heads of pump jacks sucking up oil from deep in the Earth. But these are anything but normal days.

LENDON PARTAIN: Right now, it's scary, honestly.

BURNETT: Lendon Partain is a well technician. We're standing in mesquite scrubland that overlays what experts call a monster oil field.

PARTAIN: We drove out here. Usually, you would see, you know, with all these good wells that historically have done a lot of production - they would usually all be pumping and kind of looks like caterpillars all running across the landscape, you know? And that's not happening right now.

BURNETT: All across the vast Permian that straddles West Texas and southeast New Mexico, wells have been shut in in the argot of the oil patch. American oil companies are pumping a million fewer barrels a day than they were just two months ago, according to the Energy Information Administration. All the big players out here - ExxonMobil, Chevron, ConocoPhillips - have slashed production. For Andrews County, the effect has been cataclysmic. The county is considering layoffs. And the city of Andrews will hold off preparing streets and building a new city hall.

CHARLIE FALCON: When you have a community that receives about 85 to 90% of their tax revenue from minerals, it is a serious threat.

BURNETT: County Judge Charlie Falcon follows the news and hears about other cities taking a hit from closed businesses and hospitalizations. Andrews has had only 21 cases of COVID-19. And most people have recovered. Nonetheless, West Texas is getting a double dip of trouble.

FALCON: Not only do we have oil dropping - we have coronavirus. And we don't know how long it's going to stay around. You know, with people not working, not being able to shop, not being able to, you know, now sell oil - creates a serious problem for us.

(SOUNDBITE OF POWER TOOL)

BURNETT: Bob Stewart’s welding and machine shop has lost half its business amid the paralysis in the oil patch. A few jobs keep trickling in.

(SOUNDBITE OF POWER TOOL)

BURNETT: Stewart is tall and lumbering and jovial. He's done this for nearly 40 years. He's survived downturns before, but he says he's never seen demand evaporate like this.

BOB STEWART: The whole world's stopped. There's no airplanes flying. There's no cars driving. There's no cruise ships cruising. There's no summer vacations going. We're producing a lot of oil for a world that's not using, not consuming it.

BURNETT: Bob Stewart is grateful that he has not had to lay off any of his 110 employees. He got more than a million and a half dollars through the federal government's Paycheck Protection Program. But that's not going to last forever.

STEWART: This is kind of 9/11 do-over, you know? I don't know what it looks like, but when it comes out the other side, it's going to be different.

BURNETT: With more than 12,000 active wells in Andrews County, hydrocarbons have been good to this community. There's an air-conditioning rodeo arena, a water park and new Little League baseball diamonds. The schools have a planetarium and an Olympic-sized swimming pool. All over town, gleaming motorcycles and ski boats are parked in driveways. And behemoth pickup trucks roar down Main Street.

(SOUNDBITE OF CARS DRIVING)

BURNETT: Though the one-two punch of the pandemic and the oil bust have left the region staggering, it should not have come as a complete surprise. Every oil-addicted town has been here before.

RUSSELL SHANNON: I've been interviewed by the media three times. (Laughter) And every time, it's when Andrews is on the map for some dubious reason with the economy.

BURNETT: Russell Shannon, president of the National Bank of Andrews, says established companies that save for a rainy day will weather this bust a lot better than others.

SHANNON: As I try to tell some of the younger ones when they try to get in the business, there's a storm cloud out there. Just because you don't see it today doesn't mean there's not one on the horizon. I mean, we've just - historically, we've just seen it too many times.

BURNETT: The oil field workers, with their six-figure salaries, thought it would never end, even though it always does. Mario Fernandez was laid off three weeks ago as a workover-rig supervisor. Now he's realizing just how good he had it.

MARIO FERNANDEZ: Wow, I've noticed so much. Didn't realize how much I spent when I was at work - breakfasts, lunch, taking guys out to eat, buying my crews food, you know? Of course, you want to, you know, give your guys, hey, good job. And, you know, here are some steaks and some baked potatoes or something for doing - you know, working their butts off.

BURNETT: Fernandez sits on his front stoop in Andrews, having a smoke and catching the night air after a scorching 104-degree day. Now he stays home, helps his teenage son with his homework. And he tries to keep a positive attitude.

FERNANDEZ: I used to worry a lot. The Bible says not to worry about what's tomorrow because we don't even know if we're going to make it tomorrow. So I just have faith and just believing that it's all going to come back together.

BURNETT: The question is when and how long folks can hold out. John Burnett, NPR News, Andrews, Texas.

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