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Version 6 Version 7
‘This Feels Very Different’ ‘This Feels Very Different’
(about 13 hours later)
By Tamir Kalifa and Clifford KraussBy Tamir Kalifa and Clifford Krauss
MIDLAND, Texas — In just over a month, scores of drilling rigs have been dismantled and tucked away in storage yards. Pump jacks, those piston pumps that lift crude out of the ground, have seesawed to a standstill as operators shut down wells.MIDLAND, Texas — In just over a month, scores of drilling rigs have been dismantled and tucked away in storage yards. Pump jacks, those piston pumps that lift crude out of the ground, have seesawed to a standstill as operators shut down wells.
Oil field workers who dined on strip steak and lobster before energy prices went into a tailspin in March are now standing in line at a local food bank for the first time.Oil field workers who dined on strip steak and lobster before energy prices went into a tailspin in March are now standing in line at a local food bank for the first time.
As the coronavirus spreads around the world, people are no longer commuting to work, flying on planes and going on cruises, smothering the demand for oil.As the coronavirus spreads around the world, people are no longer commuting to work, flying on planes and going on cruises, smothering the demand for oil.
“We’ve had our ups and downs, even over the last 20 years, but this feels very different,” said Matthew Hale, president of S.O.C. Industries, a pump truck and chemical services company that has operated in the Permian for 19 years. “We’re concerned about our industry, survival and what survival is going to look like.”“We’ve had our ups and downs, even over the last 20 years, but this feels very different,” said Matthew Hale, president of S.O.C. Industries, a pump truck and chemical services company that has operated in the Permian for 19 years. “We’re concerned about our industry, survival and what survival is going to look like.”
The Permian Basin, which stretches across Texas and New Mexico and is almost as big as Britain, accounts for one out of every three barrels of oil produced in the United States.The Permian Basin, which stretches across Texas and New Mexico and is almost as big as Britain, accounts for one out of every three barrels of oil produced in the United States.
The region has a storied history. It provided much of the oil for the American and Allied effort during World War II. In the 1970s, the basin created so many millionaires that many drank champagne out of cowboy boots and had trouble finding places to park their private planes.The region has a storied history. It provided much of the oil for the American and Allied effort during World War II. In the 1970s, the basin created so many millionaires that many drank champagne out of cowboy boots and had trouble finding places to park their private planes.
That was followed by a crash, after which a popular bumper sticker appeared everywhere: “God Grant Me One More Oil Boom and I Promise Not to Screw It Up.”That was followed by a crash, after which a popular bumper sticker appeared everywhere: “God Grant Me One More Oil Boom and I Promise Not to Screw It Up.”
Another oil boom did come, as Permian production in recent years spurred a global glut, stole market share from Saudi Arabia and Russia and eventually sparked a price war this year. This boom, too, is ending.Another oil boom did come, as Permian production in recent years spurred a global glut, stole market share from Saudi Arabia and Russia and eventually sparked a price war this year. This boom, too, is ending.
Most companies operating in the Permian have already shut at least 10 percent of their wells, and with local spot prices down to just $5 a barrel, smaller companies are planning to shut all their wells in the coming weeks, executives said. Refineries are running out of storage even as they wind down operations, at least temporarily.Most companies operating in the Permian have already shut at least 10 percent of their wells, and with local spot prices down to just $5 a barrel, smaller companies are planning to shut all their wells in the coming weeks, executives said. Refineries are running out of storage even as they wind down operations, at least temporarily.
Oil from the Permian supports 10 percent of the Texas economy, including production, services, shipping and refining. But as the world is stuck with too much oil, and too little demand, this area is experiencing a double shock not seen in modern times.Oil from the Permian supports 10 percent of the Texas economy, including production, services, shipping and refining. But as the world is stuck with too much oil, and too little demand, this area is experiencing a double shock not seen in modern times.
“The futures market is telling us no one should be drilling any wells,” said Scott Sheffield, chief executive of Pioneer Natural Resources, a major Permian producer.“The futures market is telling us no one should be drilling any wells,” said Scott Sheffield, chief executive of Pioneer Natural Resources, a major Permian producer.
“I don’t think we’ll see a lot of drilling until W.T.I. goes back to $35-$40,” he added, referring to the West Texas Intermediate benchmark price, which has been trading around $20 a barrel. It briefly dropped below zero in April for the first time.“I don’t think we’ll see a lot of drilling until W.T.I. goes back to $35-$40,” he added, referring to the West Texas Intermediate benchmark price, which has been trading around $20 a barrel. It briefly dropped below zero in April for the first time.
Big companies like Exxon Mobil and Chevron will keep producing but at lower rates of growth. And as drillers slow down, it will leave an entire network of suppliers, truck drivers, repair shops and scores of other companies adrift.Big companies like Exxon Mobil and Chevron will keep producing but at lower rates of growth. And as drillers slow down, it will leave an entire network of suppliers, truck drivers, repair shops and scores of other companies adrift.
The Permian produced five million barrels of oil each day early this year, from a modest 850,000 barrels a day at the dawn of the shale revolution in 2007. Producers say output will go down by at least a million daily barrels by the end of the summer, and may end 2021 as low as 3.5 million barrels a day.The Permian produced five million barrels of oil each day early this year, from a modest 850,000 barrels a day at the dawn of the shale revolution in 2007. Producers say output will go down by at least a million daily barrels by the end of the summer, and may end 2021 as low as 3.5 million barrels a day.
Since the Permian began producing oil in the early 1920s, booms and busts have been an unpredictable yet recurring certainty, like the tumbleweeds that blow across the desert.Since the Permian began producing oil in the early 1920s, booms and busts have been an unpredictable yet recurring certainty, like the tumbleweeds that blow across the desert.
Long-abandoned ghost towns are strewn across the arid landscape, reminders of the toll of past oil-price collapses. During the Great Depression, when oil prices sank to 13 cents a barrel (about $2 in 2020 dollars), and again in the 1980s when crude dropped nearly 80 percent, most oil producers in the Permian and nearly every major Texas bank were devastated.Long-abandoned ghost towns are strewn across the arid landscape, reminders of the toll of past oil-price collapses. During the Great Depression, when oil prices sank to 13 cents a barrel (about $2 in 2020 dollars), and again in the 1980s when crude dropped nearly 80 percent, most oil producers in the Permian and nearly every major Texas bank were devastated.
The last few weeks have felt like eerie reminders of that past.The last few weeks have felt like eerie reminders of that past.
The Permian made a miraculous recovery over the last decade as the vanguard of the fracking boom that helped the United States approach its long-sought goal of energy independence.The Permian made a miraculous recovery over the last decade as the vanguard of the fracking boom that helped the United States approach its long-sought goal of energy independence.
Updated June 12, 2020 Updated June 16, 2020
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April.
Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission.
Exercise researchers and physicians have some blunt advice for those of us aiming to return to regular exercise now: Start slowly and then rev up your workouts, also slowly. American adults tended to be about 12 percent less active after the stay-at-home mandates began in March than they were in January. But there are steps you can take to ease your way back into regular exercise safely. First, “start at no more than 50 percent of the exercise you were doing before Covid,” says Dr. Monica Rho, the chief of musculoskeletal medicine at the Shirley Ryan AbilityLab in Chicago. Thread in some preparatory squats, too, she advises. “When you haven’t been exercising, you lose muscle mass.” Expect some muscle twinges after these preliminary, post-lockdown sessions, especially a day or two later. But sudden or increasing pain during exercise is a clarion call to stop and return home.
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
Exxon Mobil returned, and Chevron, BP and Royal Dutch Shell all began to invest heavily as the Permian became the hottest oil play in the world. Struggling elsewhere, Exxon Mobil and Chevron have bet much of their futures on this old field.Exxon Mobil returned, and Chevron, BP and Royal Dutch Shell all began to invest heavily as the Permian became the hottest oil play in the world. Struggling elsewhere, Exxon Mobil and Chevron have bet much of their futures on this old field.
Now, only 26 crews are fracking in the Permian, down from 47 in March and 127 in January.Now, only 26 crews are fracking in the Permian, down from 47 in March and 127 in January.
“People don’t know how to react yet,” said Thomas Bruder, a senior manager at ProPetro, a major hydraulic fracturing and well cementing company. “We’re taking it day by day.”“People don’t know how to react yet,” said Thomas Bruder, a senior manager at ProPetro, a major hydraulic fracturing and well cementing company. “We’re taking it day by day.”
Oil executives are desperate to save their businesses, many of which are overextended with debt. More than 10,000 workers have already been let go or furloughed in and around Midland and Odessa, the industry’s hubs in West Texas. Four times as many might ultimately lose their jobs, executives say.Oil executives are desperate to save their businesses, many of which are overextended with debt. More than 10,000 workers have already been let go or furloughed in and around Midland and Odessa, the industry’s hubs in West Texas. Four times as many might ultimately lose their jobs, executives say.
“The pricing is so low we cannot possibly break even and pay our people,” said Jim Wilkes, president of Texland Petroleum, which has been in business since 1973. The company has run out of buyers for its production of 7,000 barrels a day and plans to shut off its 1,211 wells over the next few days.“The pricing is so low we cannot possibly break even and pay our people,” said Jim Wilkes, president of Texland Petroleum, which has been in business since 1973. The company has run out of buyers for its production of 7,000 barrels a day and plans to shut off its 1,211 wells over the next few days.
“We’re going to have to shut down our production,” Mr. Wilkes said.“We’re going to have to shut down our production,” Mr. Wilkes said.
The human cost of the layoffs is just starting.The human cost of the layoffs is just starting.
In mid-March, during his last lucrative week as a “hot shot” truck driver before the downturn, Bill Cunningham, 62, clocked over 2,000 miles on five runs delivering loads of casing and tubing around the Permian.In mid-March, during his last lucrative week as a “hot shot” truck driver before the downturn, Bill Cunningham, 62, clocked over 2,000 miles on five runs delivering loads of casing and tubing around the Permian.
Last week, Mr. Cunningham climbed into his tuxedo-black one-ton Ford F-350 pickup for only two round trips from Odessa to Midland and back, totaling 120 miles. One was to deliver six pipe couplings. The other was to pick up a check.Last week, Mr. Cunningham climbed into his tuxedo-black one-ton Ford F-350 pickup for only two round trips from Odessa to Midland and back, totaling 120 miles. One was to deliver six pipe couplings. The other was to pick up a check.
“Guys like me who are up in their 60s, they’re not going to get hired in a lot of places,” said Mr. Cunningham, who has seen five booms and busts since moving to Odessa in 1979. “That’s the only thing that I’ve got, that I can do,” he said. “We’re not going to starve to death tomorrow, but we might the next day.”“Guys like me who are up in their 60s, they’re not going to get hired in a lot of places,” said Mr. Cunningham, who has seen five booms and busts since moving to Odessa in 1979. “That’s the only thing that I’ve got, that I can do,” he said. “We’re not going to starve to death tomorrow, but we might the next day.”
Tamir Kalifa reported and photographed from Midland and the surrounding areas. Clifford Krauss reported from Houston.Tamir Kalifa reported and photographed from Midland and the surrounding areas. Clifford Krauss reported from Houston.