Boom to Bust: Oil Cycles in Texas

Boom to Bust: Oil Cycles in Texas by Annie Garcia

1 At the turn of the twentieth century, Texas was made up mainly of farms and ranches. However, the discovery of rich oil fields across the state in the 1920s quickly pushed Texas to the forefront of the petrochemical industry. A record number of people flocked to the state in search of "black gold" and easy wealth. Reports of big oil strikes near Odessa and Midland turned these rural West Texas towns into population draws.

2 An oil operation required a huge labor pool. Drilling for oil was hard, dangerous work that required long hours. Oil companies promised high wages to entice workers to come to Texas. Since Odessa had many active wells, men looking for work flooded the town. A tidal wave of support businesses, such as refineries and equipment suppliers, followed. Merchants soon built hotels, restaurants, and stores. By 1930, the sleepy cow town of 750 residents had surged to 5,000.

3 Odessa faced many problems in dealing with this huge influx of people, one of which was insufficient housing. As the need for workers increased, new laborers flooded the town. Many were young, unmarried men with no particular skills or education. Oil companies set up "man camps" next to the fields to house them. Rows of tents or hastily constructed wooden shacks crowded the sites.

4 Along with the oil boom came extreme danger. Fires and explosions were common and presented the greatest concern. Toxic fumes constantly filled the air. Conditions were also unsanitary; tuberculosis, diphtheria, and other contagious diseases spread quickly throughout the camps and town. Another problem facing the early oil field workers in Odessa was a shortage of stores. The laborers had lots of money and were willing to pay high prices for goods. Even with the development of new stores and restaurants, however, customers often had to wait in long lines for hours to buy something.

5 While most of the oil workers lived in Odessa near the fields, the company owners and investors resided in Midland, 20 miles away. Before 1920, Midland was a leading West Texas commerce center with a population of 1,800. Midland boasted several schools, banks, hotels, restaurants, and even an opera house. With the boom, merchants constructed luxury hotels, shops, and restaurants directed at the oil companies' wealthy clients. By 1930, nearly 5,500 people lived in the city.

6 Midland residents faced the same problems as those in Odessa. There were not enough hotel rooms or houses to rent. Businessmen willingly paid inflated prices to sleep on a cot in a hotel hallway. Standing in line and paying exorbitant rates became normal for customers at stores and restaurants. Families often accompanied the businessmen to Midland. As a result, there were not enough schools or teachers to accommodate the increasing number of children arriving with their parents. The local government did not have the money to fund the growth, so oil companies often funded their own schools.

7 Midland and Odessa reached the height of the oil boom in 1926. Then, new oil fields opened in East Texas, and production all over the state increased at a steady pace. However, the arrival of the Great Depression in 1930 slowed the economy; as manufacturers closed their businesses, the demand for oil dropped significantly. Oil kept flowing from the fields, though. Soon there was a glut of oil, and prices fell to fifteen cents a barrel. Most oil companies went broke. Workers left the oil fields as quickly as they had arrived. As a result, Odessa and Midland went bust.

8 Over the next 80 years, Midland and Odessa experienced two more cycles of oil boom and bust. Afterward the only oil left was locked in rock far underground. Oil companies found that using traditional drilling methods to extract this oil was too expensive and would not yield enough profit to be worth the cost. However, recent advances in technology have made it possible to tap into these resources. As a result, Odessa and Midland entered another oil boom in 2010.

9 As in previous booms, oil companies now once again need a large workforce and are offering high wages to attract employees. Unskilled oil laborers commonly receive $100,000 per year and truck drivers can earn $300,000 with overtime. Workers still work long hours each day, but unlike job sites in the 1920s boom, the work environment is much safer. The lure of higher pay has contributed to a fifty-four percent population rise in Midland and Odessa in the nine years since the current boom began.

10 Once again, there is a shortage of housing. Camps are popping up near the oil fields. Instead of tents and wooden shacks, though, RVs are crammed together in tight rows. Houses that rented for $1,000 a month in 2010 rent for $2,500 in 2019. Many people cannot afford the inflated prices and choose to live in towns as far away as 100 miles or more. The schools in Odessa and Midland are feeling the effects of the boom, too. Many school positions remain unfilled because jobs in the oil industry pay so much more and the housing costs are so high. School districts have had to form a partnership with area universities and the TNTP (formerly called The New Teacher Project) in an attempt to attract teachers at slightly higher salaries than in neighboring towns. Moreover, higher student-toteacher ratios are typical, making classrooms crowded. Unlike the 1920s boom, the government has to build the schools, but the budget planners did not expect this explosive growth. There is no money or time to build schools, so school districts set up portable classrooms to hold the growing numbers of students.

11 Traffic is the biggest problem Midland and Odessa face. The roads and highways are congested twenty-four hours a day. Tankers and heavy trucks crawl along roads at all hours. Commuters drive to and from work. Although only 2% of the Texas population resides in Midland and Odessa, 11% of statewide traffic-related deaths occur in the area, making transportation issues the most dangerous part of this oil boom. Still, the current oil boom cycle is on the upswing, and the industry is cautiously optimistic that it will last for several decades. Experts believe the need for oil will continue to increase in developing nations, so the demand will remain steady. Moreover, they plan to watch the oil supply carefully. They do not want history to repeat itself and for a bust to happen for a fourth time.

How did the oil boom of the 1920s impact the towns of Odessa and Midland, and what challenges did they face as a result?

What was one significant challenge faced by the towns of Odessa and Midland during the 1920s oil boom, and how did it impact their development?