Despite Oil Surge, Few West Texans See Return to ‘Good Old Days’
ODESSA, Texas (AP) _ Once the epitome of the 1980s oil boom, this West Texas oil town is now plagued with closed businesses, for-sale signs and ever-shortening store hours.
As thousands of oil industry officials gathered here Wednesday for the 1990 Permian Basin Oil Show, crude prices were at a decade high.
Still, no one was talking about a return to the good old days.
Industry officials here for the nation’s largest inland oil show appeared to be doing more window shopping than buying.
″This quick rise in prices will not be the answer,″ Steve Todt, general manager of Midland-based Cactus Drilling Co., said of crude’s current price. ″This industry was decimated during the mid-1980s. It will take years to get it back on its feet again.″
The price of a 42-gallon barrel of sweet crude oil, known here as West Texas Intermediate, closed down $2.17 at $36.72 in Wednesday’s trading on the New York Mercantile Exchange.
Prospective buyers shuffled from booth to booth, inspecting skyscraper-like rigs and pumpjacks.
But wallets stayed tucked away.
″They are not quite in the spending mood,″ said Rad Cagle, an oil show director, sporting a Stetson hat and snake-skin boots.
″I think people are upbeat, and as soon as those oil prices stabilize at around $20 to $25 a barrel, the folks will get real excited. But until then, they are not going to get crazy with the checkbook.″
″Nobody is making plans for next year based on $40-a-barrel oil,″ said Gary Johnson, a Phillips Petroleum Co. representative at the oil show. ″We would like to think prices will stabilize around $25 a barrel soon. But if a war breaks out in the Mideast, the prices we are seeing now would seem cheap.″
Towns like Odessa and nearby Midland are hoping for a comeback - albeit a gradual one.
Pointing to a graph indicating the number of rigs drilling in the Permian Basin over the past 50 years, Todt points to a line drawn nearly off the chart in 1981.
″There were 663 rigs pumping in the Permian Basin that year,″ he said. ″Today we have 150 working. Nobody feels like we could get back to that level again. And I don’t think anyone wants to go back to that. It was excessive.″
The end of an eight-year war between Iraq and Iran in the mid-1980s uncovered a huge surplus of oil in the Middle East. Prices dropped and the bottom fell out.
Locals watched the demise of nearly every oil-related business that had lined up for miles on Highway 80, connecting Midland and Odessa.
″It’s tough to see Odessa like this,″ Billy Burcham said. ″This town is oil. And when times were good, you would have thought this was downtown New York. But when the market dropped, people couldn’t get out of here fast enough.″