U.S. Oil Boom Towns Risk Ghost Town Future

The world has spent a decade gorging on fuel from America’s shale basins, and oil prices are topping $100 a barrel. So it might seem an odd time to be contemplating the energy transition. But that's precisely the task facing the small towns across places like Texas, Wyoming and New Mexico: deciding when to move on from their bedrock industry, even when it’s in an upswing.

Recent volatile swings in the oil market are a stark reminder that even as prices rally, the next bust could be just around the corner. The current geopolitical situation makes the contradiction even more acute. If Russia’s invasion of Ukraine means prolonged disruptions for energy supplies in the coming months, the world will become even more dependent on U.S. oil. But in the bigger picture, governments across the globe have pledged to wean themselves off of fossil fuels, and some analysts say peak oil demand could become a reality within a decade.

For America’s small oil communities, getting the timing right can mean the difference between losing out on the last great boom and turning into a ghost town. At stake is not only hundreds of thousands of U.S. jobs, but also more than $138 billion generated annually through tax revenues for localities, states, tribes, and the federal government.

Morse Haynes, 63, runs economic development for Andrews, Texas. Having spent all his life in or around the Permian Basin, Haynes knows what the industry means for his town of almost 15,000, and he’s not ready to move on.

“So much of our community, that’s just who we are. All these businesses, they’re here because of the oil field,” Haynes said. “We still think fossil fuels will be around a while.”