OIL BOOMS REVISITED: UPS & DOWNS OF THE PERMIAN BASIN

June 2019 | Kristin K. Smith

The Permian Basin in western Texas is booming - again. I recently had the opportunity to visit the Permian, so I packed a copy of Roger M. Olien and Diana Davids Olien’s 1982 book Oil Booms: Social Change in Five Texas Towns as my makeshift guide to the oil fields. Their insights on the social impacts of oil development are as relevant as ever, though today’s technologies - from hydraulic fracturing to horizontal drilling - create their own set of social, environmental, and economic impacts.

When Olien and Olien published their book in the early 1980’s, the energy boomtown scholarship focused on the social ills and disruption prompted by industrial energy development and rapid population growth (think Kohrs 1974 and Gilmore 1976). Olien and Olien’s book set a different tone and agenda for investigating boomtowns. They called for a “revision of the dark boom-to-bust view of oil booms” and noted that economic disaster post-boom is possible but not inevitable (10). They lamented the lack of scholarly research on oil booms and, in particular, the lack of longitudinal research that addressed how communities change over time due to oil development. Through extensive archival research and interviews they dug into the social aspects of five western Texas towns that boomed during the first half of the 1900’s: Midland, Odessa, McCamey, Wink, and Snyder. 

While I was in Texas I visited each of the five towns highlighted in Oil Booms. My purpose here is to share some of my preliminary reflections and photos from this trip.

The five towns in Oil Booms vary significantly in their socio- and political economic context. Western Texas has a long, episodic history of oil development spanning from the early 1900’s to today. As noted by Olien and Olien, Midland and Odessa were established towns prior to oil development but their populations didn’t take off until western Texas’s third boom (1948 – 1953). Today, they are major hubs for the oil and gas industry. In contrast, McCamey and Wink were established in response to Spraberry oil development in the 1920’s and, due to their smaller size and lack of economic diversity, more susceptible to the ups and downs of the oil market. Snyder did not experience impacts from oil development until the late 1940’s with the opening of the Canyon Reef formation. Olien and Olien describe its development as steadier and less tumultuous when compared to Wink and McCamey. 

The latest round of oil development in the Permian is staggering: when I visited in May 2019 there were over 450 rigs operating in western Texas and New Mexico, and oil production was ~4.1 million barrels per day. For comparison’s sake, the Bakken (my normal research region) had 56 rigs in May 2019, and oil production was ~ 1.4 million barrels per day.

While some of the towns in Oil Booms have thrived, all of the communities have experienced enormous volatility over the last 80 years, as depicted in the population charts below. Dramatic changes in population growth create practical challenges for local governments as they try to plan for and finance the right level of infrastructure and services - see my forthcoming dissertation for more information on this topic!

Source: U.S. Census Bureau. Accurate population data for communities that host oil and gas development is notoriously difficult to obtain due to their rapid growth and influxes of temporary workers. I use the Census data here with the caveat that it is probably inaccurate but the best we have.

Odessa (Ector County) | 2010 Population: 99,940

In the 1930 census, Odessa’s population was the smallest of the five towns highlighted in Oil Booms; a decade later, Odessa’s population was roughly 9,500 – a roughly 300% increase, and it was larger than Wink, McCamey, and Snyder combined. Another growth spurt occurred between 1950 and 1960, when Odessa’s population increased from 29,495 to 80,338 – a 172% increase. The community is still grappling with the long-term impacts of these population surges. For example, most of the community’s housing and infrastructure were built during the 1950’s boom, and much of it is now in need of maintenance.

Olien and Olien attributed Odessa’s growth to its role as a regional service hub for the oil and gas industry. Similarly, the city’s 2016 Comprehensive Plan noted that its “economy is intricately tied to the energy industry” (10). The latest boom in the Permian has created growth challenges for the city, including outward sprawl (particularly in the city’s eastern edges), housing shortages, and inflation, amongst other typical boomtown impacts. 

I spent two nights in Odessa and was struck by the city’s constant buzz in its outer fringes: traffic was constant, big grocery stores were busy, and hotels had full parking lots. The downtown, however, was eerily vacant. Many of the businesses were closed and abandoned. While this is somewhat surprising given the city’s strong economic growth, my hypothesis is that this development pattern is due to the geographically dispersed nature of unconventional oil and gas development: it benefits industry if development and investments target the fringes where people can easily access services as they commute from the oil field. Unfortunately, this creates a donut-shaped economic geography of boomtowns where there is a lot of action on the outskirts of town, but a hole in its middle. Notably, Odessa’s community leaders have prioritized downtown infill and (re)development in their Comprehensive Plan.

While in Odessa I enjoyed running the walking path around the University of Texas – Permian Basin. The campus has eclectic landmarks, including a home of George H.W. Bush and Barbara Bush (relocated to campus in 2002), a couple of oil rigs, and even a replica of Stonehenge!

Photos: 1) Public art in Odessa. 2) Downtown redevelopment - coming soon? 3) Empty buildings in downtown Odessa. The county courthouse is the last building on the right. 4) Busy traffic en route to a grocery store on Odessa’s outskirts. 5) Replica Stonehenge on the University of Texas - Permian Basin campus.

Midland (Midland County) | 2010 Population: 111,147

In Olien and Olien’s description of Midland, they described how skeptical the community was about oil’s ability to translate into long-term benefits. They noted that many residents expected a bust and that “…in 1929 Midland old-timers dismissed oil man Thomas S. Holgan’s 12-story Petroleum Building as ‘Hogan’s Folly.’”

Today, Midland is the largest city in the Permian Basin. The city’s community leaders now suggest that the “boom-and-bust era is over,” and their Comprehensive Plan emphasizes that reaching 200,000 residents is not a matter of if but when. To some extent this optimism is warranted, but it also fails to take into account the volatility of global oil markets and the uncertainty associated with boom development – as Trey Murphy succinctly points out in this interview with Marfa Public Radio. Sidenote: Diana Davids Hinton, formerly Diana Davids Olien aka co-author of Oil Booms, is also interviewed!

Midland shares many of the same challenges as Odessa, including sprawl, housing shortages, and stressed infrastructure. Its downtown has more of a “city-feel” than Odessa due to the Petroleum Building and other high rises. Midland’s Comprehensive Plan also emphasizes the need for downtown revitalization, and while I was visiting I noted several major construction projects. 

One of my highlights from staying in Midland was visiting the Petroleum Museum. I really enjoyed walking around the grounds and seeing the retired oil and gas equipment.

Photos: 1) Downtown Midland skyline. 2) Pumpjack mural in downtown. 3) Midland Map Company: “Serving the mapping needs of the oil and gas industry in the Permian Basin since 1950.” 4) Storm coming in, as seen from my hotel window. 5) Entrance to the Petroleum Museum.

McCamey (Upton County) | 2010 Population: 1,887

Located about an hour south of Odessa, McCamey was founded during the 1920’s oil boom in the Permian. The industry surrounding McCamey was dominated by large corporations as opposed to smaller operators. Seven major oil companies leased the majority of the surrounding land prior to the town’s incorporation in 1926. Humble Oil Company (a predecessor to Exxon) built one of the first western Texas oil refineries in McCamey in 1927. The complex included a company camp and regional offices. Humble moved their offices to Midland when the refinery closed in 1932, after which McCamey experienced gradual population decline. Olien and Olien reported that in 1960 the population was about the same as the 1931 population.

Today, McCamey promotes itself as the “Wind Energy Capital of Texas.” It lives up to its name: you can see several large-scale wind projects from its downtown. Municipal buildings and businesses – some of which were open and others were abandoned – line the main streets through town. There were obvious signs of the oil field, including a number of rigs being stored in a staging area, but when I stopped by on an early weekday morning the town was overall very quiet. More oil-related development could be on the way: the Cactus II Pipeline (announced on February 22, 2019) is proposed to link Wink to McCamey (stage 1) and then McCamey to Corpus Cristi / Ingleside (stage 2). No strategic plans could be found online for this town or for Upton County.

Photos: 1) Large mural celebrating McCamey’s history. 2) The Chamber of Commerce’s sign reads “McCamey: Wind Energy Capital of Texas.” 3) Seemingly abandoned buildings were a common sight in town.

Wink (Winkler County) | 2010 Population: 940

Like McCamey, Wink’s incorporation as a town was prompted by oil development in the mid-1920’s. Olien and Olien describe Wink’s trajectory as “one of explosive growth, precipitous decline, and lingering death, interrupted only by the comic entrance of the federal government with an urban renewal program…” (15).

The federal renewal funding could be its own research project. Wink used most of its ~$900,000 grant to ready parcels for redevelopment, including clearing land, paving roads, and improving curbs and gutters. Perhaps not surprisingly, developers were not eager to purchase the completed lots given Wink’s remote location. As Olien and Olien quip, “By way of lasting benefit, Wink still has some of the finest curbing and gutters in the region – though much of it borders disused streets and totally vacant blocks” (16). This article by Robert S. Strother, published in a 1964 Readers Digest, laments the federal government’s misguided attempts at Wink’s “urban renewal.”

In my field notes about Wink, I described it as the Oil Booms town that is struggling the most, noting that it has “a lot of temporary and ramshackle housing.” Nonetheless, I also discovered some positive signs, including a new community center that is being built in a park on the southern edge of town.

In the Oil Booms chapter on public services and education, Olien and Olien compare and contrast McCamey and Wink as two similarly sized towns in the same region that were founded at approximately the same time but had very different experiences with oil development. As noted above, most of the residents in McCamey were employees of major oil companies, whereas Wink residents overwhelmingly worked for independent and small operators. The authors suggest that the industry’s composition led to more stability in McCamey than in Wink. This would be an interesting question for future research.

No strategic plans could be found online for Wink or for Winkler County.

Photos: 1) A new community center for the county is being built in Wink. 2) Singer and songwriter Roy Orbison lived in Wink as a child, as highlighted by this road sign. (3) Wink’s City Hall sits next to several building in need of repair. 4) Water and communication infrastructure in town.

Snyder (Scurry County) | 2010 Population: 11,202

Snyder was the county seat and a regional center for farmers and ranchers prior to the discovery of oil north of town in 1948. The subsequent boom lasted until 1951. West Texas College, a two-year community college based in Snyder, was established in 1971. Today Snyder benefits from nearby oil and wind development, but it’s top economic industry is educational services, healthcare, and social assistance. The two largest employers are the Snyder Independent School District and the Texas Department of Criminal Justice.

Snyder has a beautiful and seemingly thriving downtown. The main downtown is a square that is anchored by the county courthouse. The city’s Comprehensive Plan (adopted in 2017) highlights the downtown corridor as one of Snyder’s assets and emphasizes the need to promote businesses that are “home-grown, entrepreneurial, or reflect local culture and flavor.” My first impression of Snyder was that its downtown really sets it apart. As I wrote in my field notes, “It might be the first downtown I’ve seen out here that is walkable and occupied!”

Olien and Olien argue that Snyder’s leadership was able to leverage oil development into long-term benefits, thanks to strategic infrastructure investments in schools, West Texas College, and an indoor rodeo arena. Since I research infrastructure decisions in the Bakken, I’m particularly interested in these economic development strategies. While I was in Snyder I did stop by the rodeo arena, now called “The Coliseum.” Interestingly, Western Texas College actually took over ownership and operations of the arena in 2008 and immediately made significant renovations (thanks to a donation from a wind company). This suggests that the arena may have become a financial burden to the county at some point. I would love to dig into the long-term implications of Snyder’s economic investments more deeply…one day?

Photos: 1) Downtown Snyder on a Wednesday morning. 2) A rig I drove by en route to Snyder from Midland. 3) The Coliseum, an indoor arena that Olien and Olien highlighted as an economic development investment. 4) Scurry County Towle Park. 5) Housing near Snyder High School.

My trip to the Permian was short, only five days. Nonetheless, it was useful for helping me compare and contrast the Permian to my own research findings from the Bakken. For instance, I was interested to see industrial wind and unconventional oil and gas coexisting in the Permian. What synergies and/or conflicts exist between these two industries? Wind developments have been unpopular to date in North Dakota (see this latest project rejection).

Additionally, this trip prompted me to think more about the downtown areas of communities that serve as oil and gas industry hubs. How have public and private investments in downtowns changed for these communities over time? Are there differences between the Permian and the Bakken and, if so, why? Watford City and Williston, North Dakota seem to have kept their downtowns vibrant, though research (such as by Dr. Felix Fernando, University of Dayton) shows how development has sprawled out along major highways. What strategies are needed to keep downtowns thriving?

Finally, Olien and Olien’s book offers thorough case studies about how different communities have navigated oil development. I’m particularly interested in the economic development strategies that different communities took, why these were chosen, and what their implications are now that decades have passed. Oil Booms: Social Change in Five Texas Towns offers compelling case studies that are ripe for an update!

Acknowledgements

I would like to send a big shout out and THANK YOU to fellow PhD students Anne Junod (Ohio State University) and Trey Murphy (University of North Carolina). Anne introduced me to Oil Booms: Social Change in Five Texas Towns, which prompted this whole trip. Trey graciously met me for barbeque in Texas, gave me a tour of his family’s ranch, and helped me understand the socio-economic context of the Permian Basin. His insights and advice were critical for this trip. Thank you, Anne and Trey!