Texas oil towns brace for cutbacks


Published: Wednesday, January 21, 2009 at 11:26 p.m.
Last Modified: Wednesday, January 21, 2009 at 11:26 p.m.

MIDLAND, Texas - In the West Texas oil patch, they can see the downturn coming at them from miles away like a pickup truck kicking up a dust cloud on the horizon.

With crude dropping below $40 a barrel from a high of around $150 over the summer, oil and gas companies in the Lone Star State are cutting back on drilling, the layoffs are beginning, and the boom of the past few years appears to be drawing to a close.

The boom may not necessarily give way to a bust. But the days of plentiful jobs, big paychecks and shiny new pickups and SUVs seem to be numbered.

"It's been a good ride up, but we're bracing ourselves for the ride down," said Midland City Manager Courtney Sharp, who expects a drop in tax revenue next month because of slumping sales in the city of about 98,000.

Kevon Horst, 19, landed his first job over the summer in the booming West Texas oilfields when crude was selling for about $140 a barrel. Horst and about 20 others working a rig near Canadian, about 40 miles from the Oklahoma line, were laid off recently.

He and his girlfriend moved in with her mother, and he is struggling to keep up with the payments on his new truck.

"I'm in a bind with it," Horst said. "No one's hiring now."

Others in the Texas Panhandle and across the Permian Basin to the south, which produces 20 percent of the nation's oil, are finding themselves in similar straits.

While overall unemployment is still low in Texas oil towns - 3.1 percent in Midland and 3.7 percent in Odessa, or about half the national average - that could change if oil prices don't bounce back sometime soon.

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