The Oil Ghost Towns of Texas
If Texas’s Permian Basin is Exhibit A for the U.S. oil boom that refuses to die, then the Eagle Ford, a smaller shale patch some 400 miles to the east, represents all those places that have been left behind.
It’s not that the oil rigs totally disappeared after crude prices abruptly collapsed in 2014. But it’s awful quiet. The wells here aren’t the kind of gushers that make it attractive to keep pumping at $50 a barrel.
As the shale drillers moved on to richer fields, the South Texas landscape became pockmarked with abandoned structures. This nimbleness—the ability to just pack up and leave at a moment’s notice—may give U.S. oil companies a competitive advantage against their more rigid state-run OPEC rivals, but there is a human cost to it all.
Lives are turned upside down. Plans are crushed. Savings are drained. As three Eagle Ford veterans—Jill Potts, George Garcia and Randy Katzmark—can attest.
What does the bust look like? To Jill Potts, a pair of work gloves.
Fluorescent green ones, to be exact. She flips them on her desk at Summit Oilfield Supply, the shop she and her husband own in Cuero, a little town to the southeast of San Antonio and in the heart of the Eagle Ford formation.
The days when roughnecks hopped out of their pickups and plunked down $5 for a pair without thinking about it are long over. Potts marked them down to $2.20 a pair, barely above cost, and still her clients balk at the price.
“They’re asking me for quotes on these so they can compare and get the best price,” Potts, 49, says with a laugh. “They’re drilling multimillion-dollar wells and they’re haggling over pennies.”
She entered the oil industry more than a decade ago. She was waitressing in the Dallas-Fort Worth area, and several of her regulars were oil and gas workers lured to the Barnett shale, the epicenter of America’s then-nascent shale boom.
The workers kept mentioning enamels and industrial paints they were having trouble finding. So Potts started ordering them online and delivering them to drilling sites. Over the years, she and her husband, Skip, built the business into a full oil supply company selling everything from wire rope to wrenches the size of dinosaur bones.
They moved their business to the Eagle Ford in 2014. Things went great for a while. They were raking in $250,000 in revenue a month. Then the crash hit, and by 2016, that figure sank to as low as $25,000. Profits vanished. They cut out some of their more conspicuous spending—like Skip’s new-truck-a-year habit—and scaled back the allowance money they sent to their kids in college. (One of them, Tyler, stopped studying petroleum engineering and is preparing instead to be a wind-turbine engineer, upon the urging of his mother: “I told him, ‘Don’t live and die by the price of oil.’”)
Still, Potts says she has no regrets. She and Skip are turning a profit again—a competing supply shop went out of business recently, helping drive traffic their way—and they’re socking those proceeds back into inventories. That way, when the next boom comes along, they figure they’ll be ready to capitalize.
“I’m a gambler,” Potts says. “A lot of people in the oil field are. They say it all the time when they come in my shop: ‘Lord, just give me one more boom, and this time I promise I won’t piss it away.”
Some 50 miles to the west of Cuero lies Karnes City. Back in the summer of 2011, the tiny town got a new restaurant: Partners BBQ, with proprietor George Garcia behind the grill.
From the outset, the place was hopping.
The Eagle Ford was in full swing and the roughnecks would come from miles around to scarf down platefuls of brisket, sausage and ribs and wash it down with sweet tea served at long picnic tables under a corrugated metal roof. Things were going so well that Garcia opened a second location just down the road in the town of Kenedy.
And then the drilling slowed to a crawl, and those long lines of diners became a distant memory. “It was scary,” Garcia says. “It got real slow.” Today, the two restaurants combined are generating only the revenue that the first one did on its own a few years ago.
Garcia, 51, got into the barbecue business late in life. For years, he had worked in, and around, the oil industry, most recently at a facility that makes drilling equipment for Baker Hughes Inc.
Eight years ago, in the wake of yet another oil market collapse, he was laid off. "It left a bad taste in my mouth," Garcia says. "I wanted to start over in something new."
Unemployed, he passed his spare time grilling meat and drinking beer with friends. Eventually, they convinced him to turn his passion into a profession.
He tries to put a positive spin on the current slowdown. His business has picked up at least some of late. And he says he’s not even sure he’d like to return to the days when it was a constant challenge to cook the food fast enough to feed the crowds. He remembers waking up at 2 a.m. nearly every day to start smoking brisket and finishing after 6 p.m., when the last of the catering jobs was done.
“The boom was good for business,” Garcia says, "but it’s not a fun way to live."
Randy Katzmark was fast asleep late one Sunday night when his phone rang. It was a rig operator. He was in need of a “hot shot,” industry jargon for an urgent delivery of essential equipment—drill bits in this case.
It’s the kind of job that Katzmark, 60, would have likely turned down a few years ago. But not now. Not with his company, R. Katz Tool & Supply Inc., struggling the way it is. During the height of the Eagle Ford boom, R. Katz was supplying as many as 52 rigs and employing as many as 18 people in its office outside Cuero’s main strip. Today, it’s got 11 rig clients and three employees.
So Katzmark got out of bed and hopped into his black Ford F-350 pickup truck. It was a few minutes after midnight. By the time he got the parts, dropped them off and pulled back into his driveway, the sun was starting to come up. “I’m trying to keep the doors open and keep the few employees I do have,” he says.
Katzmark has been working in the oil industry since the mid-1980s. He’s worn many hats over the years and even did stints in South America—Venezuela, Colombia and Bolivia—before founding R. Katz in 2004, four years before the first shale well was drilled in the Eagle Ford, ushering in the region’s go-go days.
He spends a lot of his time in his pickup, driving the highways and country roads that crisscross the Eagle Ford landscape. A recent trip took him south, through the industrial corridors surrounding the town of Alice, and revealed the scars the bust has left. Massive corrugated metal structures that housed offices and warehouses supporting the frenetic drilling activity are empty now. Faded paint on the sides spells out names of companies such as Drilco and Genco and Forum Energy Technologies. Weeds run wild in parking lots that were once full of trucks and equipment.
To Katzmark, the place looks like a “ghost town.”
His own business hit bottom a few months ago, when his roster of rig clients dropped to just four. Things have started to rebound some—as they have for Potts and Garcia—but still, he’s flirting with the idea of relocating to the roaring Permian Basin, where there are four times as many rigs in operation.
“If I was 38 or 42, there’d be no decision whatsoever; I’d be out there in six hours,” Katzmark says. “At this age, I have to ask myself: Do I really have enough energy in me to do it right?”