Thank you! I'm wondering, from the time the oil crunch began, how long was it until it ended and the economy in the oil states was good again? The oil crunch lasted into at least part of 1987 didn't it? Also, what was done to bring the price of oil up from $10 a barrel to where it was back up to a good price for the businesses in the oil sates to be able to start making money again?
I'm going from memory here, but should have the dates pretty close:
In 1985 Black Sunday was the unofficial start of the oil bust. This was the first time one of the Seven Sisters (Exxon) had announced it was pulling out of oil fields in small towns. It was bad. Really bad. Entire towns were abandoned and became ghost towns. The local politicians were helpless. "The only business to be in right now is the moving business" they said, as people fled the small towns of Texas, Oklahoma, and Louisiana.
Our entire Texas and American culture had almost given up. As Kenny Coyote mentioned, the rock'n roll industry, the car industry, and even the television and movie industry felt the effects after Black Sunday. This is from an Oil Industry trade magazine from those days:
The 1980s: a rough decade for cars, rock music and oil
The 1980s were a mixed up decade. Killer British-driven rock music and groundbreaking R&B artists were giving ground to wimpy, fake artists like
Milli Vanilli. The era of glasspack, dual carb, Hurst-shifted Detroit muscle cars had thrown in the towel to embarrassing vehicles like
Chrysler’s K-car. The U.S. had only one car in the
list of the world’s fastest cars in 1986: the ’86 Ford Mustang, which could go zero-to-60 in 7 seconds and had an MSRP of $14,750. The winner that year was an ’86 Ferrari that could go zero-to-60 in 4.5 seconds.
But don't worry, my friends. Ole J.R. Ewing always comes out on top.
The fun and exciting thing about Texas is that after every bust there is another boom on the way.
Also, what was done to bring the price of oil up from $10 a barrel to where it was back up to a good price for the businesses in the oil sates to be able to start making money again?
The truth is, there was a combination of things that happened to bring back the boom. Here's the way I remember it:
Everything hit the bottom on Black Monday, October 19, 1987. While many people were panic selling, the long term thinkers (Folks like Bobby Ewing) were watching for the rebound saying, "Now's not the time to panic and sell. Now's the time to keep a cool head and buy the bargains that others are dumping." They were also saying,
"Buy oil stocks on the fear of others, sell them on the greed of others"
"Bet with your head, but not over it"
And those who bet on the rebound won big time!
China saw the opportunity in 1987 of cheap labor and cheap energy and they jump-started their manufacturing businesses. They started buying Texas oil-- and lots of it! The emerging markets started mining and mining takes a LOT of energy. Shipping companies were moving product on anything that would float-- and using Texas crude to power it.
Ancient trucks were pulled out from storage and put to work delivering goods demanded during the rebound. And these trucks needed Texas oil.
And just as fast as the bust hit, the boom was underway. I remember you had to wait in line to buy a new pickup. Real estate agents couldn't handle all the calls of people wanting to buy land in Texas. There weren't enough Steak Houses (Cattleman's Club) to fit all the people who were meeting to sign new oil contracts. "Dora Mae! My usual table!" The best selling car in the U.S. wasn't a practical car such as the Honda Accord or the Toyota Camry. The best selling car wasn't a car at all-- it was the Ford full sized pickup.
And THAT wasn't ostentatious enough. Texans would buy their new pickups, then lift them and put oversize tires on them. It wasn't enough to have the biggest house in the neighborhood-- you had to have the biggest pickup truck. If you have to ask how much it costs, then you can't afford it!
People who weren't part of the new oil boom would make fun of those who were:
"Oh, sure. The oil company wives just HAVE to have a brand-new, lifted four wheel drive pickup truck to drive to the country club!"
(Not everyone could drive a wood-paneled station wagon like Sue Ellen).
Oil field workers making minimum wage and only working a few days a week suddenly had raises and unlimited overtime. Some of my friends were called into the boss's office for emergency meetings where they were paid TEN TIMES their current wages if they would sign new contracts. You couldn't spend your money fast enough!
Make lunch, fix dinner? No time! Oil company credit cards were handed out so that people could eat on the run.
Test drive new boats, campers, and RVs? No time! Have your people call my people. Just deliver it before the next BBQ (and hope Cliff doesn't get pushed into the pool).
The rebound is the good time you see on Dallas. Where people are making money so fast they can't spend it all.
We are going through a boom time right now in Texas. Since I'm older now, I feel a responsibility to grab the younger oil field workers by the back belt loop and slow them down. I tell them,
"Take a few hundred dollars a week out of your paycheck and stash it away. If I'm wrong, and there's not another oil bust, then you will have a bunch of money set aside for no reason. If I'm right, and there's another oil bust coming (and there always is), then you will be glad I told you this because you will have the cash on hand to get you to the next boom."
And that's the view from Texas. And yes, it's a helluva ride, and even more fun in person!
