It’s official: The coronavirus is a pandemic.
We’ve seen the ramifications in all walks of life. Cities are on lockdown. Events are being cancelled. Airlines are making international flights in nearly empty planes. And the stock market, particularly oil markets, appear to be in free fall.
Over the past few days, I’ve done quite a bit of driving between Springfield and Columbia, a trip of nearly three hours drive time and roughly 170 miles. Along the way, I noticed low gas prices; the best of which got as low as $1.85 per gallon.
A welcome surprise for my wallet, but was the sudden drop in prices solely the result of the coronavirus? Well, partly. The rest of the story is much bigger. I was only vaguely aware that the global oil market was entering a price war driven by Saudi Arabia and Russia which started, more or less, because of the coronavirus.
It’s worth emphasizing: Low oil prices hurt all oil suppliers, including Saudi Arabia. This is very hard on the kingdom’s economy. But the Saudis are making a bet: They have a ton of oil and they can produce it much more cheaply than anybody else can. So even though they’re hurt too in a low-price environment, they think they can outlast some of their rivals, specifically Russia in this case.
Now I can’t imagine too many readers shedding a tear for these oil producing countries, but what’s interesting is the effect the price war might have on U.S. oil producers. With the daily, weekly, monthly onslaught of news during the Trump Administration, it somehow slipped under my radar that America was now the world’s leading oil producer, thanks to the shale oil boom in West Texas’s Permian Basin.
Not too many readers would shed a tear for them, either, but it’s interesting to look at the cascading effect throughout the wider economy and grapple with the realization that a lower price at the pump isn’t necessarily a universal good.
Well, it will affect it negatively because at these type of prices, it’s - the [U.S.] domestic companies are really under a lot of financial pressure. They’re going to cut back on their budgets. They’re going to cut back on the drilling. Some of them will go bankrupt. And they’re kind of pulling their horns in wait. And the significance is that it’s not just about the oil sector, but this is a major element in our balance of payments now. And it’s become - because the supply chains, the equipment, the manufacturers that go into it come from the Middle West and other parts of the country, this has an effect across the entire country, really.
While on the road between Springfield and Columbia, I caught up on the entirety of Texas Monthly’s incredible podcast series, Boomtown. It’s a deep-dive into the ascendency of the Permian Basin and those who would thrive during the boom. But the story is much richer than just that.
The podcast grew out of a long feature article that host Christian Wallace published last June in the magazine, and, much like McMillion$ on HBO, it’s a wonderful expansion of a wonderful piece of reporting. It doesn’t stop at the podcast though; Texas Monthly’s entire digital presentation of the Boomtown is impressive. The magazine did not just start covering the Permian Basin and the oil industry in the midst of it’s relatively recent rise; there are years’ worth of stories folded into the digital presentation, and it’s all predictably great.
Read it here:
If you read the article and listen to the podcast, you’ll see the former serves as a script for the latter. But it’s incredible how much insight the podcast gives into just how much work the journalist is doing to write such a story.
What I love most is you can see the myriad ways Wallace and his editors conceptualized the story; there are so many facets to the increased production of oil in the Permian Basin, from the increased traffic on a particular highway overwhelming the infrastructure and creating a dangerous “Death Highway” (Ep. 1) to the flourishing of adjacent industries related to sex work (Eps. 5 & 6) to the shaky economics of fracking (Ep. 9) to the history of the man who invented fracking (Ep. 10).
To me, it’s emblematic of the difference between hard news coverage and magazine news coverage. Wallace’s article came months after the U.S. had claimed the top spot for world’s oil producers, yet the article (and especially the podcast) look at the effect on the entire region, from the workers to the local high school football programs. It shows depth and characters that hard news doesn’t have time to care about, quite frankly. And it provides an abundance of riches, just like the flowing oil itself.
All the while, there’s a personal touch to the podcast because Wallace, the narrator, is from the Permian Basin; in all the ways the story is a history of West Texas, it’s also a personal history for him. His rapport with the characters in the podcast is built on a lifetime of knowing them, and it shows.
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