As Trump Leaves Permian Oilfield, Industry Insiders Question If 2020 Bust Marks Texas Oil’s Last Big Boom
Yesterday, President Trump left Midland, Texas, after arriving in the state’s Permian oilfield region for a $2,800 a plate luncheon and a “roundtable” that required each participant to pony up $100,000.
The west Texas Mr. Trump left behind bears little resemblance to the region as it was when he first took office in January 2017, as the shale rush resumed following 2016’s oil price plunge.
Today, the shale boom of the 2010’s is officially bust, battered not only by the US’s outsized failure to control COVID-19 outbreaks and an oil price war in which foreign producers proved their ability to steer oil prices, but also a wave of multi-billion dollar write-downs by oil giants — write-downs that predated both the price war and the pandemic and resulted from the industry’s perpetual struggles to generate profits from shale drilling and fracking regardless of the price of oil.
Last Friday, just 103 active drilling rigs dotted Texas, according to data from Baker Hughes. That’s down from 403 drilling rigs as 2020 began and the state’s peak this decade of 930. Just 251 active oil and gas rigs could be found across the entire United States, the lowest number recorded since Baker Hughes began tracking the rig count back in 1940.
In late February, the nighttime horizons around Midland and Odessa were still dotted with brightly burning oil well flares, dozens of flickering licks of flame that cast an uncertain light across the mesquite and cotton fields of west Texas. Mancamps and hotels already appeared partially emptied out, even while a constant flow of truck traffic streamed along the desert highways.
Empty worker housing at FTSI in Odessa, Texas. May 27, 2020. Credit: ©2020 Justin Hamel
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