Editor's note: This is part of an occasional series looking at the impact of the current energy boom on communities near the oil and gas plays in Oklahoma.
ELK CITY — Like many in western Oklahoma, Marjorie Anderson and her family are more than familiar with riding out economic booms and busts.
Settling in the area before statehood, Anderson's grandparents and great-grandparents flourished in the early days of Oklahoma history and endured the trials of the Great Depression and the Dust Bowl.
“My mother tells about being little and how awful it was in the '30s,” she said.
Anderson's family survived the Dust Bowl on black-eyed peas.
Decades later, oil was discovered below her family's land and royalty checks began pouring in, first in the 1950s and again in the 1970s and early 1980s.
“My grandmother was a millionaire several times over off the land, but she still canned black-eyed peas because she didn't want to starve,” Anderson said.
While the older generation was more cautious with the oil money even in the boom of the 1970s and 1980s, Anderson and her peers worried less about the future.
“I drove a Mercedes,” she said. “When I bought the car, my grandpa said he could buy a plow with that money.”
That carefree culture — and the money that spurred it — dried up overnight in the summer of 1982, leaving Elk City with construction projects incomplete and investors out millions.
“When the boom busted, you could see people going down the street with everything on the back of their cars,” longtime Elk City resident and real estate agent Nancy Henrichsen said. “They left their pets behind. They left their houses with food in them. It was a horrible, horrible mess. There were lots of suicides around here at that time. It was the biggest gloom over Elk City I have ever seen.”
Over the past 10 years, economic activity has returned to western Oklahoma. Natural gas drilling has been followed by construction of wind energy turbines, and another oil boom has led tens of thousands of people to flood Elk City and western Oklahoma again with jobs and money.
This time, however, the community and its residents are determined to do things differently.
“People are smarter now,” Henrichsen said. “They're more conservative with their money. They're taking care of their families and their homes rather than flying around the world. Back then, you would see a huge truck pulling a very expensive trailer with Jet Skis or a boat on the back. Everything was about money and toys and wanting to have a good time.”
One way the city is smarter now is that it is working with the companies in the area to develop a more diverse economy.
A new Bar S plant, a Super Walmart and a new hospital are examples of diversification among other industries.
Unlike most small towns throughout the country, Elk City's downtown corridors are full. Every storefront is active, and cars occupy most parking spaces throughout the day.
“We have the longest strip mall in the world,” businessman Basil Weatherly said. “It extends from the west side of town all the way through Main Street. If you look south from Main Street to the highway, there's probably 10 miles of strip mall, and it's all full.”
The city and companies also are working to diversify within the energy industry.
To that effort, the city bought 160 acres just south of Interstate 40 and developed it as an industrial park.
“The city gave away or nearly gave away a lot of the property sites,” city councilman and longtime Elk City resident Tom Mike Johnson said. “I can't believe how quickly that built up. That cost the city a lot of money and it isn't generating much sales tax revenue, but those jobs are supporting families that have moved here, and those jobs are not just jobs in the field.”
Elk City-based Superior Fabrication Inc. began in 1997 by supplying parts for natural gas production in the Elk City area. The company since has expanded to 277 employees at three locations — including more than 200 in Elk City's industrial park — and is now manufacturing parts for oil and natural gas production for companies throughout the country and world.
“One thing that has helped us is that we can switch easily between equipment that treats natural gas and equipment that treats liquids,” Lakey said. “When the price of natural gas goes back up, we'll be positioned to make more of that product when the demand is there.”
Onward and upward
While Elk City residents already are preparing for the next downturn, they are hopeful that things will be different this time around.
There are some signs that the current growth could continue well into the future.
Apache Corp. recently completed its purchase of western Oklahoma acreage from Cordilla Energy Partners.
With the deal, Apache now operates about 1,125 wells in the area and will have 25 rigs searching for oil by the end of the summer. The company has identified another 10,000 potential well sites in the area, said Larry J. Bledsoe, Apache's district production manager in Elk City.
At a rate of about 250 wells a year, the company could be active in the area for another four decades.
“We have nothing now compared to what it could be,” Bledsoe said.
Houston-based Linn Energy also has a large presence in Elk City, operating 800 to 900 wells in the area. The company said it plans to invest $500 million to $600 million in wells between Elk City and Shamrock, Texas — 55 miles away — over the next few years. Its district office supports 59 Linn employees and 23 contract workers every day.
“We're really committed here,” said Paul Lamle, Linn Energy's district production superintendent in Elk City.
The jobs and money have returned to western Oklahoma, but for many residents throughout the area, the look is decidedly different.
Marjorie Anderson now runs Elk City's Homestead Title & Closing LLC. In her experience, there is far more money in western Oklahoma than most people realize. But the people who have been through the bust have learned from previous busts, she said.
“People who are third-generation oil are invested in banks and in land. They are using their money wisely,” she said.