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April 02, 2013

Signs of Oil Rush Dominate Texas Town

by Mike Osborne

The United States is in the midst of another energy production boom and, by 2020, could be producing more oil than global leader Saudi Arabia.
 
One place that knows all about the impact an oil rush can have is the tiny East Texas city of Kilgore.

More than eight decades after oil was discovered there, pumps are still lifting Texas crude out of the ground. The pumps are everywhere, making their constant thump and rattle impossible to escape.

Kilgore’s been through several cycles of energy boom and bust in the years since. The lessons learned are preserved in the city’s East Texas Oil Museum.

“We were less than 400 in population according to the census of 1930,” said Joe White, the museum’s director. "Literally overnight, after the Crimm well came in on 28 December, 1930, at 22,000 barrels a day, the population swelled to over 10,000 and things have never been the same again.”

In fact, things quickly got out of hand in Kilgore. The Texas Rangers had to be called in to restore order. They had no place to keep prisoners, so a local church building was pressed into service as a temporary jail.

Many of the newcomers ended up living in the town park that first winter. Their makeshift shelters of cardboard and pine branches provided little protection from the weather, and disease spread quickly in the crowded camps.

“[There were] all kinds of respiratory ailments,” White said. “I’m told by the old doctors that it wasn’t unusual to find someone dead down there almost every morning.”

The epicenter of Kilgore’s oil boom was a quarter-hectare of land in the heart of town. So much oil was pumped from this one city block, it came to be known as “The World’s Richest Acre.”

“There were well over 1,000 derricks inside the city limits of Kilgore,” said Bill Woodall, editor of the local newspaper, the Kilgore News Herald. “Literally, the skyline was dominated by derricks. The backs of buildings, they just knocked them off, and that’s what happened here. They knocked off the backs of buildings, and set up derricks and drilled wells.”

All that oil money meant bigger churches, nicer homes, a small college, library and theater seating 900 in town of 10,000. But there were also challenges.

To this day, oil pumps, tanks and pipelines take up so much land that Kilgore has a housing shortage, and the rollercoaster economy makes it hard to build more.

“The last four or five builders that have come in to put in housing additions, four of them went bankrupt. One did it twice,” said Kilgore Mayor R.E. Spradlin III.

Money dries up so quickly in a down cycle, builders get caught holding unsold properties. Spradlin said those highs and lows make it hard for everyone to plan ahead, including city leaders.

“You know, the city’s income goes up and down. In the crash of the mid-1980s, we had to cut people’s pay. We had layoffs,” he said.

Spradlin was born and raised in Kilgore, and said that in spite of the challenges of boomtown life, residents are fiercely proud their roughneck heritage.

“My junior high school song was,‘Neath the towering steel of derricks stands our junior high,’” Spradlin recalled, singing the tune. “So it permeated every single facet of living in Kilgore.”

Kilgore routinely gets calls from other small towns wanting copies of the regulations the city wrote to manage its oil rush.

“All the laws about how close together you drill wells, etcetera, that are used worldwide now, came from mistakes we made in Kilgore by drilling wells every 25 feet,” Spradlin said. “We had oil wells drilled in churchyards, in people’s back yards, school grounds.”

Spradlin tells America’s latest batch of energy boomtowns to keep recurring expenses low and save as much as they can. But the most important lesson of all, he tells them, is to remember that the rush of money can end as quickly as it began.