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| In a Texas Oil Town, Pain but No Panic as Prices Crash | In a Texas Oil Town, Pain but No Panic as Prices Crash |
| (7 days later) | |
| KARNES CITY, Texas — Leaner days are back in the oil patch of South Texas. | KARNES CITY, Texas — Leaner days are back in the oil patch of South Texas. |
| Once-busy roads are empty except for the workers repairing the potholes from the damage done by truck traffic in the last boom. Oil producers have begun to lay off employees and call their service companies to say that they have drilled their last well for a while. One temporary-housing camp is offering free food to attract lodgers, and trailer parks are emptying. | Once-busy roads are empty except for the workers repairing the potholes from the damage done by truck traffic in the last boom. Oil producers have begun to lay off employees and call their service companies to say that they have drilled their last well for a while. One temporary-housing camp is offering free food to attract lodgers, and trailer parks are emptying. |
| And the collapse of oil prices to nearly $30 a barrel — roughly a 50 percent decline from the beginning of the year — is just beginning to sink in. Saudi Arabia’s decision last weekend to ramp up production, even as the global coronavirus outbreak saps demand for fuel, is driving up global supplies with no place to go but storage tanks. | And the collapse of oil prices to nearly $30 a barrel — roughly a 50 percent decline from the beginning of the year — is just beginning to sink in. Saudi Arabia’s decision last weekend to ramp up production, even as the global coronavirus outbreak saps demand for fuel, is driving up global supplies with no place to go but storage tanks. |
| But even as some itinerant workers are moving on, full-time residents of Karnes City and the surrounding county are not panicking, at least not yet. They know the ups and downs of oil cycles, and they see just another trough, whatever the role of geopolitics or a pandemic. | But even as some itinerant workers are moving on, full-time residents of Karnes City and the surrounding county are not panicking, at least not yet. They know the ups and downs of oil cycles, and they see just another trough, whatever the role of geopolitics or a pandemic. |
| “Everybody knows oil is boom and bust, and everyone thinks it may not be today, tomorrow or next week, but eventually the price will go back up,” said Ken Roberts, the city manager. “This isn’t their first rodeo.” | “Everybody knows oil is boom and bust, and everyone thinks it may not be today, tomorrow or next week, but eventually the price will go back up,” said Ken Roberts, the city manager. “This isn’t their first rodeo.” |
| When I visited Karnes County during the last downturn nearly five years ago, it was the biggest producer of oil in Texas, and there was alarm in the air as the price of crude dropped from more than $100 a barrel to under $45 within a year. Oil companies dropped drilling crews and slashed payments to local service companies. Farmers who had become millionaires from royalties from wells drilled in their fields were suddenly having trouble making loan payments on new tractors. | When I visited Karnes County during the last downturn nearly five years ago, it was the biggest producer of oil in Texas, and there was alarm in the air as the price of crude dropped from more than $100 a barrel to under $45 within a year. Oil companies dropped drilling crews and slashed payments to local service companies. Farmers who had become millionaires from royalties from wells drilled in their fields were suddenly having trouble making loan payments on new tractors. |
| The local oil fields have since made a modest comeback, along with the economy that depends on them, as drilling activity has continued. But even though the county offered the most productive shale in the Eagle Ford field, the drilling frenzy here never fully returned to the peak it achieved between 2009 to 2014, even as oil prices crept higher in 2018 and 2019. | The local oil fields have since made a modest comeback, along with the economy that depends on them, as drilling activity has continued. But even though the county offered the most productive shale in the Eagle Ford field, the drilling frenzy here never fully returned to the peak it achieved between 2009 to 2014, even as oil prices crept higher in 2018 and 2019. |
| Some of the most active drillers, like Pioneer Natural Resources, sold their wells to focus on the Permian Basin in West Texas, where the break-even price on drilling wells is a few dollars lower. (The very best well around here breaks even at $38 a barrel, according to local officials, well above the current price.) | Some of the most active drillers, like Pioneer Natural Resources, sold their wells to focus on the Permian Basin in West Texas, where the break-even price on drilling wells is a few dollars lower. (The very best well around here breaks even at $38 a barrel, according to local officials, well above the current price.) |
| Others, like Sanchez Energy, filed for bankruptcy protection, while ConocoPhillips, Marathon Oil and EOG hung on in the prospect that oil prices would climb. | Others, like Sanchez Energy, filed for bankruptcy protection, while ConocoPhillips, Marathon Oil and EOG hung on in the prospect that oil prices would climb. |
| Five years ago, Brooks Holzhausen, the chief operating officer of Supreme Vacuum Services, which hauled fracking fluids and oil well wastewater, was struggling to stay in business by slashing his payroll. When I returned this week, his business was gone, and he had left town. | Five years ago, Brooks Holzhausen, the chief operating officer of Supreme Vacuum Services, which hauled fracking fluids and oil well wastewater, was struggling to stay in business by slashing his payroll. When I returned this week, his business was gone, and he had left town. |
| In its place was Supreme Rental Services, which rents big tanks that hold liquids used in the oil field such as drilling mud, fracking fluids and brine waters that come up out of the ground with oil and need to be disposed. | In its place was Supreme Rental Services, which rents big tanks that hold liquids used in the oil field such as drilling mud, fracking fluids and brine waters that come up out of the ground with oil and need to be disposed. |
| “We’re not going to make rash decisions,” said Ches Swann, the manager of the operation and its 22 employees. He said he was cutting his workers’ hours and bracing for demands by oil companies that he lower his service prices. But he said he would use the downturn as an opportunity for his workers to do maintenance on the tanks, replacing valves and liners, which will extend their life spans and produce savings in the years ahead. | “We’re not going to make rash decisions,” said Ches Swann, the manager of the operation and its 22 employees. He said he was cutting his workers’ hours and bracing for demands by oil companies that he lower his service prices. But he said he would use the downturn as an opportunity for his workers to do maintenance on the tanks, replacing valves and liners, which will extend their life spans and produce savings in the years ahead. |
| “In the oil business it would be naïve not to expect peaks and valleys,” he said. “If you can weather the lows, you’ll be stronger, and the new competition will be hard to break in.” | “In the oil business it would be naïve not to expect peaks and valleys,” he said. “If you can weather the lows, you’ll be stronger, and the new competition will be hard to break in.” |
| At least some oil workers, especially veterans who have lived through the highs and lows, remain hopeful. | At least some oil workers, especially veterans who have lived through the highs and lows, remain hopeful. |
| The oil industry got some good news on Friday when President Trump announced that the Strategic Petroleum Reserve would take some oil off the market — perhaps as much as 500,000 barrels a day for a few months. While that is a modest sum relative to U.S. and global production, oil prices shot up about 6 percent after the president’s remarks. | The oil industry got some good news on Friday when President Trump announced that the Strategic Petroleum Reserve would take some oil off the market — perhaps as much as 500,000 barrels a day for a few months. While that is a modest sum relative to U.S. and global production, oil prices shot up about 6 percent after the president’s remarks. |
| “Once we get a hold of the coronavirus scare, things will turn around,” said Jason Boss, a truck driver who hauls crude oil. He is so confident that he and his family rented a house on Wednesday and are preparing to move out of their trailer. | “Once we get a hold of the coronavirus scare, things will turn around,” said Jason Boss, a truck driver who hauls crude oil. He is so confident that he and his family rented a house on Wednesday and are preparing to move out of their trailer. |
| Mr. Boss said he felt assured because so many oil companies had reduced their exposure to fluctuating oil prices by hedging, fixing their sale prices at a time when crude prices were higher, usually for several months. “Of course, if the hedge contracts are up, and the oil price is still low, we’ll have something totally different to worry about,” he added. | Mr. Boss said he felt assured because so many oil companies had reduced their exposure to fluctuating oil prices by hedging, fixing their sale prices at a time when crude prices were higher, usually for several months. “Of course, if the hedge contracts are up, and the oil price is still low, we’ll have something totally different to worry about,” he added. |
| His wife, Kristina, said she wasn’t overly worried, either. She recalled growing up watching her father, who worked his way up from menial jobs to work on the oil rigs, manage through booms and busts. | His wife, Kristina, said she wasn’t overly worried, either. She recalled growing up watching her father, who worked his way up from menial jobs to work on the oil rigs, manage through booms and busts. |
| Updated July 7, 2020 | |
| The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization. | |
| 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. |
| Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. | Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles. |
| A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. | A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico. |
| The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. | The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth. |
| 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. | 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. |
| 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.) |
| 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. |
| “I remember in 1998 we had just bought a house and owned three vehicles,” she said, recalling one of the industry’s big busts. “One day we had it all, and the next we lost it all. My dad stayed with it, reassured us, and then things went up again.” | “I remember in 1998 we had just bought a house and owned three vehicles,” she said, recalling one of the industry’s big busts. “One day we had it all, and the next we lost it all. My dad stayed with it, reassured us, and then things went up again.” |
| Local officials and merchants said they were fairly sanguine, in part because the county was inoculated by the 2014-15 shock when members of the Organization of the Petroleum Exporting Countries decided to open up the production spigots to undercut American shale drillers who were flooding the market with new oil. | Local officials and merchants said they were fairly sanguine, in part because the county was inoculated by the 2014-15 shock when members of the Organization of the Petroleum Exporting Countries decided to open up the production spigots to undercut American shale drillers who were flooding the market with new oil. |
| Since the county tax base dropped in 2014 and 2015 by 20 percent, after several years of rapid growth, it has recovered by between 5 percent and 10 percent, according to the county treasurer, Vi Swierc. She said the county’s share of sales taxes, which slumped by two-thirds from a high of $1 million a month when oil prices fell five years ago, has remained steady the last two or three years at $300,000 to $400,000 a month. | Since the county tax base dropped in 2014 and 2015 by 20 percent, after several years of rapid growth, it has recovered by between 5 percent and 10 percent, according to the county treasurer, Vi Swierc. She said the county’s share of sales taxes, which slumped by two-thirds from a high of $1 million a month when oil prices fell five years ago, has remained steady the last two or three years at $300,000 to $400,000 a month. |
| Karnes City, the county seat, put $6 million into emergency reserves during the go-go days, so financing for fire, police, water and sewer services for the city’s 4,000 people appears secure. | Karnes City, the county seat, put $6 million into emergency reserves during the go-go days, so financing for fire, police, water and sewer services for the city’s 4,000 people appears secure. |
| Property values around Karnes County have remained relatively high. People say land values are steady because there is so much shale soaked with oil under the ground that companies will inevitably want to drill again. | Property values around Karnes County have remained relatively high. People say land values are steady because there is so much shale soaked with oil under the ground that companies will inevitably want to drill again. |
| One thing that has fallen are the royalty checks that residents receive from the wells on their property as wells drilled years ago rapidly decline in production and prices swoon. In the early years of drilling, residents used their royalties to remodel their homes. Families traded in their Ford Explorers for Lincoln Navigators, according to Ms. Swierc, the county treasurer, and people bought beach cottages in nearby Rockport. | One thing that has fallen are the royalty checks that residents receive from the wells on their property as wells drilled years ago rapidly decline in production and prices swoon. In the early years of drilling, residents used their royalties to remodel their homes. Families traded in their Ford Explorers for Lincoln Navigators, according to Ms. Swierc, the county treasurer, and people bought beach cottages in nearby Rockport. |
| Ms. Swierc and her nine siblings shared royalties from two wells on family property, and with early gains she repainted her house, refurbished her floors and paid for her daughter’s wedding. But those days are over, and the royalties are down to a trickle. | Ms. Swierc and her nine siblings shared royalties from two wells on family property, and with early gains she repainted her house, refurbished her floors and paid for her daughter’s wedding. But those days are over, and the royalties are down to a trickle. |
| “I just texted my little sister to say it’s either a six-pack or a case of beer this month,” she said of their expected payments. But she added that Karnes County would do fine. “I’m optimistic, she said. “This is the nature of the beast. Oil goes up and down.” | “I just texted my little sister to say it’s either a six-pack or a case of beer this month,” she said of their expected payments. But she added that Karnes County would do fine. “I’m optimistic, she said. “This is the nature of the beast. Oil goes up and down.” |
| I revisited the local John Deere dealership to see if people who had fallen behind on their tractor payments the last time oil went down had finally met their obligations. Josh Morales, the store’s general manager, said they had eventually, with only a few exceptions. While the store’s sales are down from the highs of 2013 and 2014, Mr. Morales said revenues were now stable. | I revisited the local John Deere dealership to see if people who had fallen behind on their tractor payments the last time oil went down had finally met their obligations. Josh Morales, the store’s general manager, said they had eventually, with only a few exceptions. While the store’s sales are down from the highs of 2013 and 2014, Mr. Morales said revenues were now stable. |
| “Nothing has changed, as of now,” he said. “That could change next week, tomorrow or later this afternoon.” | “Nothing has changed, as of now,” he said. “That could change next week, tomorrow or later this afternoon.” |