In Cotulla, Texas, life rises and falls with the price of oil

But four years after an oil bust left the town reeling, locals are wary of repeating the same painful story.

With 24 hotels in a town of only 4,200 people, Cotulla lies on the road to the Permian Basin, the world’s largest active oil field, and to America’s largest oil export terminal in Corpus Christi.

Convoys of trucks carrying crude or sand, key to extracting shale oil, pass through the town regularly.

Their hurried activity stands in sharp contrast to the somber string of chain hotels, which greet visitors as they approach the town of just five square kilometers (1.9 square miles).

“Anyone who is new to Cotulla asks the same question: why are there so many hotels?” said Stephanie Patel, a manager at a local 65-room La Quinta.

Cotulla’s central location, in the middle of the Eagle Ford Shale oil field in South Texas and near the Permian Basin, converted it to a necessary road stop for the oil industry, but also for trade with Mexico, thanks to its place on one of the nation’s longest roads.

The I-35 Highway snakes 1,500 miles (2,400 kilometers) north, linking the border town of Laredo, Texas to Duluth, Minnesota, near the Canadian border.

Cotulla recently grew even more reliant on the fossil fuel industry with the construction of a pipeline on the outskirts of town which will deliver oil from Eagle Ford to Corpus Christi, 130 miles away.

– ‘Very crazy’ –

During the shale oil boom around 2010, when the price of a barrel frequently topped $100, the town center turned into one big construction site.

“It was very crazy,” said City Administrator Larry Dovalina. “People were practically planting tents to stay in this area.”

“Originally we had probably the highest-priced Holiday Inn Express in the US. It was charging somewhere around $200 to $300 a room and it was 100 percent occupied. You couldn’t get a room if you wanted to.”

But in October 2014 but the oil bubble burst as global production surpassed demand. From more than $100 a barrel, prices fell by half in just six months, bottoming out at $26 within a year.

“The oil industry came to a screeching halt,” said Andy Lipow of Lipow Oil Associates.

Investments and workforces suffered sweeping cuts, with the industries that depended indirectly on oil, such as hotels and restaurants, also bled dry.

Hotel occupancy and room rates in the town tumbled, forcing one establishment into bankruptcy.

The contagion also hit the Cotulla’s finances, with the local treasury shrinking by a third and falling below $400,000.

It has since struggled to recover and the average hotel room price fluctuates between $80 and $100 and occupancy rates are not what they used to be.

To avoid another collapse, Cotulla wants to diversify, possibly into livestock or building an airport.

But painful memories persist.

“With this boom, we have seen many million dollar hotels,” said Carl Childers, who has lived in Cotulla for 50 years.

“Now, what will happen whenever it leaves? That’s my only concern.”