During the Years Following the Eighties Oil Bust There Was a Saying in Oklahoma

During the years following the eighties oil bust there was a saying in Oklahoma. “Last one to leave the State turn out the lights.” The saying was anything but hyperbole. Oil dominated the state’s industry in the eighties and the oil bust all but wiped it out.

I remember stopping on the side of the road one night in GarfieldCounty and counting seventeen drilling rigs. Seventeen-hundred rigs were drilling onshore and offshore United States. The increased drilling activity managed to stem the steep decline in crude oil and natural gas, at least for a few years.

Oil wasn’t the only industry to suffer during the eighties bust. Banking, precipitated by the downfall of Penn Square Bank, suffered dearly. For a while, a bank a day was being closed in Oklahoma. I personally banked at five different banks that all went under. The FDIC had hundreds of employees in the State. They not only managed to single-handedly destroy Oklahoma’s banking industry, they also had a large hand in crushing the local real estate industry.

When the price of oil dropped to less than $10 a barrel, rig owners began selling their rigs for scrap. Stripper wells, wells that produce less than 10 BOPD, were plugged because it cost more to operate them than they made every month. Countless thousands of stripper wells, all still capable of producing oil and gas, were plugged and the production pipe shot off, pulled and sold for scrap – a valuable United States resource lost forever.

Oklahoma survived because it turned to other things such as computers, electronics and technology. Today, the worst economy during the eighties is now the best economy during 2008. Oklahoma sucked in its over inflated gut, re-cinched its belt and learned how to survive.

The economy of oil and gas has again returned to Oklahoma, fueled by $13 MCF natural gas and $130 oil. The state receives a gross production tax from every MCF and BO, a tax not levied on any other industry.

Is it true that gross ignorance in the eighties is at least partially responsible for today’s very frightening energy crisis? Yes! I don’t often get on my soapbox but the country is today in a dire energy crisis and unlike the seventies this one is very real.