Drilling budgets across Texas and the world are being slashed. Crude prices today are almost 60 percent lower than they were six months ago. The last time the world saw such a rapid descent was the financial crisis of 2008. Before that, it was 1986, when two-thirds of Texas’ drilling rigs shut down in two years’ time.

It is a sharp turnaround for the Texas oil industry, which in just five years tripled its production and drove hundreds of billions of dollars into the economy.

For decades Texas oil had slowly been disappearing from the world market. The big companies were chasing oil buried under ocean floors off the coasts of Russia and Nigeria and in thick, tar-like crude in western Canada. Then came advances in hydraulic fracturing and the shale drilling revolution. Suddenly, what had been considered third-rate fields in Texas’ Eagle Ford and Permian Basin became some of the most sought-after prospects in the world.

Now concern is deepening that the U.S. oil industry is entering what could be a sustained downturn.

“It’s going to be devastating. For all practical purposes we lowered the barrier to entry so low that every Tom, Dick and Harry could go out and rent a rig,” said Fadel Gheit, a managing director with the investment firm Oppenheimer & Co. “The longer prices stay down, the more companies are throwing in the towel. We will see a lot more pain before we get any gain.”

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