A multitude of boom towns litters the landscape of Texas, tracing the rising and falling fortunes of the ranching and oil industries upon which so much of the state was built. Nowhere is this more apparent than in the vast Permian Basin, a geological feature that encompasses much of West Texas and contains the second-largest known oilfield on earth. The basin has been one of the United States’ greatest sources of wealth since oil exploration began in earnest in the 1920s, and its development sparked no shortage of boom towns. However, few towns saw their fortunes change as dramatically as a dusty little railroad outpost straddling the Texas Pacific Railroad between Fort Worth and El Paso – Midland, Texas.
Santa Rita No. 1
For years, the Permian Basin was known as a “petroleum graveyard.” There was oil, to be sure, but many questioned whether there was enough accessible petroleum to justify a concerted effort to reach it. Still, that skepticism didn’t dissuade a four-year effort to build a well – named the Santa Rita No. 1 – on an arid stretch of land near Big Lake, Texas. In the early morning hours of May 28, 1923, the efforts paid off. The well erupted suddenly, spewing enough viscous, black liquid to blanket the landscape over more than 250 yards. Though it wasn’t the first well to strike oil, the Santa Rita’s tremendous production began a rush to explore and develop the full potential of the mighty Permian.
The Tall City
Following the success of the Santa Rita, the surrounding area quickly became a booming center of commerce. The oilfield ushered in waves of both money and people, and few communities benefited as much as the railroad town of Midland. Hard-hit by drought and falling agricultural profits from the ranchlands encircling the town, Midland was in full decline by the time oil began to flow freely in the Permian. Thanks to its central location and convenient rail access, however, the decline was short-lived. Many of the wildcatters, oil crews and aspiring businessmen who flocked to the area naturally turned to Midland, and by the mid-1920s, the town was booming.
In 1927, new streetlights were installed to shine on the freshly paved streets. New stores, banks, churches and other facilities popped up on a regular basis. By 1929, Thomas Stephen Hogan had developed the twelve-story, 151-foot Hogan Building that would earn Midland its nickname: the Tall City. The town boasted offices for no fewer than 36 different oil companies, which further helped to infuse the growing community with cash. An airport soon followed, along with grand hotels and upscale restaurants to cater to suddenly wealthy residents.
Boom and Bust
The good times, however, were not to last. The Great Depression, along with a flood of oil from new wells in the eastern portion of the state, brought Midland to a standstill by 1930. Recovery began slowly by the middle of the decade, but it wasn’t until the extraordinary petroleum demands brought on by World War II that Midland resumed the booming development first seen in the 1920s. The postwar years were especially kind to Midland, as explosive development within the Permian saw the town become a city worthy of its nickname. The population swelled, and the Hogan Building was joined by an assortment of mid- and high-rise buildings to create a skyline visible for dozens of miles in each direction.
Another boom-bust cycle began in the early 1960s. The local economy stagnated as oil companies slowed their drilling and struggled to compete with foreign petroleum producers. The 1973 Arab oil embargo once again invigorated the city, causing skyrocketing oil prices and renewed development activity. The boom continued nearly unabated until 1986, at which point oil prices rapidly collapsed due to a massive worldwide surplus. Though the local economy had become diversified enough to ride out the worst effects, a series of boom-bust cycles continued to exact a toll on the city throughout much of the 1990s and 2000s.
Modern Midland
Needless to say, Midland has been here before. After rallying in the early 2010s, oil prices have again gone bust in recent years, sending shockwaves through the local economy of the Tall City. Thousands of oil workers have been laid off, though the city still retains one of the lowest unemployment rates in the country. Declining tax collections and budget shortfalls have challenged local schools and other government institutions. Oilfields, distribution plants and other facilities sit idle, anxiously awaiting signs of recovery. But if Midland and its residents have learned anything over the past rollercoaster of a century, it’s that the next boom is always looming just over the horizon.
Thanks to the Permian Basin, there are plenty of reasons for optimism. Oilfield development in the Permian is still more viable than nearly anywhere else in the United States, and new technologies promise greater access to the still-vast petroleum stores than ever before. The wider economy remains healthy and diverse, and the many oil companies that call Midland home have not abandoned ship. The city is still growing and still among the most prosperous in the state, and despite an oil bust that may only now be reaching its nadir, optimism abounds. The city and its most vital industry will recover, and if history is any guide, both will come back stronger than ever.
