Low Oil Prices Pose Threat to Texas Fracking Bonanza

17-Aug-2015

KARNES CITY, Tex. — No place in Texas produces more oil than Karnes County, but suddenly the roaring economy here is cooling fast, chilled by the plunging price of crude.


Workers who migrated from far and wide to find work here, chasing newfound oil riches, are being laid off, deserting their recreational vehicle parks and going home. Hay farmers who became instant millionaires on royalty checks for their land have suddenly fallen behind on payments for new tractors they bought when cash was flowing. Scores of mobile steel tanks and portable toilets used at the ubiquitous wells are stacked, unused, along county roads.

“Everybody is waiting for doomsday,” said Vi Malone, the Karnes County treasurer. “Everything was good, and everybody was getting these big checks, and everybody waited for their land to be leased, and then it all came to a screeching halt around the beginning of the year.”

That screeching was the price of oil cracking — to under $45 a barrel from more than $100 a barrel last summer. After a brief revival in the spring, the benchmark American price has swooned again by more than 25 percent, plunging this week to a new low since the recession. (by CLIFFORD KRAUSS, New York Times)