NEW YORK (TheStreet) -- We drove to South Texas last weekend for my daughter's college graduation, and from the highway the place looked much like it did when I graduated from college, in 1977.
Then, as now, an oil boom was in process.
All along I-37 and U.S. 281, from Kingsville to San Antonio, I saw oil wells being drilled deep into the Eagle Ford shale, the biggest new oil play the state has seen in decades.
And while the price of gas remains $3.30 a gallon at local pumps, there is a difference between handing that money to an Arab sheikh and a Texas oilman wearing a 10-gallon hat. The Texan spreads it around.
Thus the freeways around San Antonio are filled with brand-new SUVs and pickups, many still with dealer tags. The west side of Houston is filled with construction cranes building new office buildings for oil workers.
Friends of mine have already gotten big checks for three years' permission to drill on their land, and if anything is found they stand to gain royalties of 20% on the proceeds, or more. It's fat city.
That's one big reason why retail sales are up nationwide, according to Bloomberg, with car sales brisk and real estate prices rising.
And it's not just in Texas. There's Bakken oil coming out of North Dakota. Railroads are taking that oil out as fast as they can, and pipelines are moving up to meet it. Refiners have ample "crack spreads" even while prices at the pump fall.
Companies that are drilling the Eagle Ford, and there are more than 200 of them in all, are being joined by dozens of pipeline and service companies. Some had billboards along the highways offering jobs. The roads and roadside stands along them are filled with happy, fat, prosperous faces.
Investors also have reason to smile. Cabot Oil & Gas
Like this boom, the oil boom of the 1970s was fueled by high prices. It was concentrated at the center of the country, again much like this boom. Areas outside the oil patch suffered with stagflation, as many areas are suffering from slow growth now.
What ended the 1970s boom, in the early 1980s, was a definitive downturn in energy prices, which caused a depression in Houston even as the rest of the country recovered. It's possible this could happen again, as renewable energy supplies, led by conservation, finally put a thumb down on oil prices. That would make the higher-cost plays, like the Alberta "oil sands" and the more expensive deep-water drilling, unprofitable. It would cause a fall in the value of reserves in the ground, making exploration loans harder to come by.
But what I've learned in a career that started during one boom and may end during another, is that you can't see the end of the table while the play is in motion. It all looks like a horizon, rimmed by the gas flares from newly drilled wells.
At the time of publication, the author had no positions in securities mentioned. Follow @DanaBlankenhorn
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
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