Flood of people

In West Texas, the flood of money and workers into the region is impossible to miss. Tractor-trailers hauling drilling equipment and oil fill the roadways to the point that parents warn their teenage children about driving on the highway. Unemployment is below 4 percent, and the high salaries paid to those in the oil industry have trickled out into the larger economy.

At a McDonald’s on Interstate 20 between Midland and Odessa, managers are so eager for workers they’re offering free meals and rides to and from work. A shortage of housing has pushed rents to around $1,500 for a basic one-bedroom apartment, making life for those outside the oil industry all but impossible.

The school district has raised starting salaries to compete with cites like Dallas and Austin, but it is not enough. One of Midland’s old family foundations has had to step in to offer a $500-a-month housing subsidy for teachers — plus signing bonuses.

“We can’t find bus drivers,” said Ryder Warren, superintendent of the Midland Independent School District. “If you have a commercial driver’s license, you can earn $80,000 to $100,000 in the oil field. We start them at $11 an hour … I’ve never seen anything like this.”

For those who have been around long enough, it is reminiscent of an earlier time. Back in the late 1970s and early 1980s when unrest in the Middle East drove up oil prices, Midland was so flush with cash that a Rolls-Royce dealership opened in town and glass office towers shot up in what had been a quiet, low slung West Texas city.

But then in October 1983, on a day those left in Midland can cite like their own birthdays, the Federal Deposit Insurance Corp. announced that First National Bank, in which many of Midland’s wealthiest families were invested, was failing and being taken over by the federal government.

Drillers had borrowed heavily in a rush to develop new oil wells. And when oil prices came crashing down to a fraction of their peak value, the industry was left in a tangled mess of debts that ruined many fortunes.

Steve Pruett, a tall 57-year-old with a passing resemblance to a Hollywood actor, recently started up his own oil venture after years working for other companies. Looking out over Midland from his 10th-floor office, he says by way of explanation, “I like creating wealth.”

But almost 30 years ago, he was just another young graduate of the University of Texas' petroleum engineering program with an eye on striking it rich in oil — a third-generation oilman, he grew up working in the rigs around Midland.

But his timing was terrible. When he got hired by the oil company Arco in 1986 and was sent to Midland, he quickly realized his assignment was simply to wind down its operations.

“We called it turning out the lights,” he said. “There was no new drilling. There were maybe 20 rigs operating in the Permian. It was awful.”