In January 2012, I traveled to Oklahoma City for the first time to report on what was considered a surprising development: a U.S. oil boom. Until then, hydraulic fracturing—aka fracking—was best known for boosting U.S. natural gas production. It was just starting to be used to unlock oil trapped in deep underground layers of rock like the Bakken Shale in North Dakota, the Eagle Ford in Texas, and the Mississippi Lime in Oklahoma.

Still folded in my notebook is a typed list given to me that week by Gene Pflughoft, then the executive director of Central Oklahoma Regional Development. It enumerated the benefits of tapping shale: “Leasing the land, drilling rigs, built with hundreds of components, thousands of employees; trucks to deliver drilling rigs; drilling: many employees, highly skilled; training facilities, teachers, cooks, coordinators, janitors. Restaurants full. Motels full. Welding shops opening.”

The list now reads like a prediction of everything that’s being lost in the bust. Oklahoma City was once the beating heart of the shale revolution, home to pioneers such as Chesapeake Energy, Devon Energy, and Continental Resources. It’s now an object lesson in how quickly things fall apart when energy prices collapse. A somber symbol of the reversal: Thousands gathered in Oklahoma City to honor Aubrey McClendon, 56, co-founder of Chesapeake and one of the industry’s best-known champions, who died in a car crash on March 2, the day after he was indicted on bid-rigging charges.

Back in 2012 the prospect of a bust seemed remote. Oil was trading at $98 a barrel. U.S. crude production had begun ticking upward for the first time since the 1980s; Oklahoma’s unemployment rate was 5.4 percent, almost three percentage points below the national average; and the companies that could claim credit for it were smack in the middle of the State That Oil Built. “It’s been tremendous in terms of how reliant the state is on oil and gas,” said Chad Wilkerson, economist at the Oklahoma City branch of the Federal Reserve Bank of Kansas City.

Devon Energy, the first company to perfect shale drilling, was moving into a 50-story spike of blue glass that had just become Oklahoma’s tallest building. Continental Resources, credited with kick-starting the Bakken Shale, was moving from Enid, Okla., into Devon’s old digs. In the neighborhood of Bricktown, where I had dinner with Pflughoft at Mickey Mantle’s Steakhouse, hundreds of apartments were going up; and the newly rechristened Chesapeake Energy Arena, home of the Oklahoma City Thunder, was sold out for every game.

My calendar included an interview with McClendon, then chief executive officer of Chesapeake, who could fit me in only during the drive back to his office from the Quail Creek Golf and Country Club, where he delivered a rousing speech at the Wildcatters Wednesday Luncheon about how the U.S. could break the hold of Mideast oil. “I look forward to a world where if all you have is sand and oil, you don’t matter,” he said to applause. He told me the U.S. would soon challenge Saudi Arabia and Russia as the world’s largest oil producer. “I hesitate to call it a boom because it seems to always be accompanied by a bust,” he said—as if bringing up the possibility were unpatriotic.

John Richels, then president and CEO of Devon Energy, told me that Saudi Arabia no longer had the capacity to flood the world market—and that it would take a worldwide economic collapse to trigger a lasting decline in the price of oil. “Our longer-term view is that oil prices are going to stay fairly strong, that we wouldn’t probably see a $50 oil price for any extended period of time,” he said.

The next three years seemed to prove Richels right. Oil averaged $95 a barrel. By the end of 2012, U.S. production had jumped a million barrels a day, the biggest gain in history, a performance repeated in 2013 and 2014. Output reached the highest in more than four decades. McClendon’s prophecy of energy independence seemed within reach; imports, which made up 60 percent of U.S. consumption in 2005, fell to 24 percent.

The excitement made it easy to ignore one big problem: It was one of the most expensive booms in history. Devon, Chesapeake, SandRidge Energy, and Continental Resources were spending almost $2 drilling for every $1 they earned selling oil and gas. Moreover, the output from shale wells fell far faster than that of traditional wells, as much as 60 percent to 70 percent in the first year alone. To sustain the growth investors demanded, companies had to drill fast enough to offset those declines. That phenomenon is called the Red Queen, after the character in Through the Looking-Glass who tells Alice, “It takes all the running you can do, to keep in the same place.”

From 2011 to 2014, those four companies outspent cash flow by a combined $36.8 billion. This wasn’t a problem as long as high oil prices made refinancing easy. Years of near-zero interest rates had sent investors hunting for returns in riskier corners of the market. Of the 97 exploration and production companies evaluated by Standard & Poor’s in April 2014, 75 had ratings below investment grade. That didn’t scare investors. From 2004 to 2014, the high-yield bond market doubled while the amount issued by junk-rated companies in the industry grew 11-fold to $112.5 billion, according to Barclays. As Stanley Druckenmiller, an investor with one of the best long-term records in money management, said of Texans in January 2015: “Those guys know how to gamble, and if you let them stick a hole in the ground with your money, they’re going to do it.” Shale wasn’t sustaining the frenzy; cheap debt was.

Such was the belief in the staying power of high oil prices that in October 2014, when crude dipped to $85 a barrel, Continental liquidated its insurance protecting the company from a crash. “We feel like we’re at the bottom rung here on prices, and we’ll see them recover pretty drastically, pretty quick,” CEO Harold Hamm told investors in November 2014.

He was wrong. At the end of that month, Saudi Arabia declined to curb its output to arrest the slide. Prices collapsed. By January, oil was trading below $50, a level not seen since the depths of the financial crisis. And in defiance of Richels’s prediction three years earlier, prices stayed low. Oil is now at $37.

In the second quarter of last year, Oklahoma’s economy shrank 2.4 percent, the worst performance in the country. In February, Devon laid off hundreds of workers. SandRidge missed an interest payment on its debt last month and is now about a week from default unless it reaches an agreement with its creditors. S&P stripped Continental Resources of its investment-grade credit rating on Feb. 2 and a week later downgraded Chesapeake for the fourth time since October, calling its $9.8 billion debt load “unsustainable.”

McClendon’s vision of U.S. energy independence is within reach, but his ambitions cost him dearly. In 2012 he would come under fire following reports that he’d taken on huge personal loans to finance his investments in company wells, and in 2013 he was forced out of Chesapeake.

Oklahoma’s fortunes have been tied to the oil industry for more than a century. The last bust began in 1982 and tipped the state into a slump that lasted decades. Politicians said they’d diversify the economy. But the present just echoes the past. In 1982 the oil industry paid 13 percent of worker earnings in Oklahoma, according to Wilkerson of the Kansas City Fed. At the end of 2014, it was 14 percent.

If the 1980s are an indication, it could take years for Oklahoma to recover—even if prices rise. The state faces a $1.3 billion budget shortfall. And there’s a backlash against the industry because of recent earthquakes blamed on fracking. For now, the low unemployment rates left over from the boom are helping to soften the blow. But the cushion is eroding, says Wilkerson. “I’m concerned about the outlook,” he says. “We already have problems in the state budget. We already have higher unemployment numbers.”

At the State Capitol building, built on an oil well, State Representative Lewis Moore pulls up the posh suburb of Edmond on his Zillow app; blue dots marking foreclosures and pre-foreclosures cloud the screen. He lives in and represents Edmond, home to some of the state’s best-paid oil professionals. “It’s not good,” he says, zooming in on a house with a pool. “It’s not good that it can happen this fast.”