With sanctions on Russia’s oil industry and increased fracking in the United States,
oil prices around the world fluctuate significantly year by year. Facing a potential “bust”,
many oil boomtowns attempt to diversify their interests before the oil runs out. So, what
is an oil boomtown? And where are they located around the world?
An oil boomtown is a region that grows quickly and amasses large profits after the discovery
of oil. In turn, oil corporations flock to the area, providing high wages and high rates
of job creation. Many migrant workers arrive, hoping to “strike it rich”. To supply
the new workers, companies spring up, creating an economic boom. Because of the incoming
wealth and lack of housing to keep up with the new demand, rent prices skyrocket. In
2014, the city with the most expensive rent in the United States was actually an oil town
in North Dakota, called Williston [Will·is·ton]. In the last 5 years, Williston’s population
has more than doubled.
One of the earliest successful oil boomtowns is the Texas city of Beaumont. It rocketed
to international fame and fortune in 1901 when the world’s first major oil “gusher”
was discovered. This oil strike produced more oil than all the other wells in America at
the time, combined. It would also later spawn some of the current giants in the oil industry,
including Texaco.
The boomtown of Beaumont continued to thrive even after the initial strike dried up. But
many oil boomtowns are not as lucky. Mentryville in California, and Pithole in Pennsylvania,
both became ghosttowns when oil reserves were tapped. Because oil wells are unpredictable,
they can dry up and leave a boomtown without enough money to sustain its growth. Also,
when oil is found in a somewhat undeveloped country, weak government oversight and regulatory
laws can mean that the oil companies effectively run the town. And with that, labor laws, corruption,
and wealth inequality can run amok. In Nigeria, for example, dishonest oil industry practices
are said to have cost the nation tens of billions of dollars.
The most famous oil boomtowns presently include Dubai and Abu Dhabi in the United Arab Emirates,
which are some of the richest cities on the planet. Africa’s oil boomtowns, including
Luanda [Loo-ANda] and N’Djamena [UN-jah-me-na], even outrank famous Middle Eastern cities
in oil wealth. In Canada, Calgary produces 70% of the country’s crude oil. And in the
United States, Texas has almost 10 billion barrels of oil in proven reserves. Oil boomtowns
are concentrated in the Middle East, however, they can crop up anywhere in the world.
In America, the oil industry is experiencing a shakeup. New fracking practices have added
tons more domestic oil to the market, and deflated prices of oil from typical well-setups.
But although some are sweating the present international oil market, the reality is that
the future of alternative energy may see a final end to oil boomtowns once and for all.
If you want to see what other negative consequences countries face with lower oil prices, take
a look at our video here. There’s a link in the description below to that full video.
Thanks for watching!