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Ricky Johnson stays in an RV park when not working in oil fields near Stanton. He works 10-to 14-hour days, 21 to 30 days at a time. Photo: (San Antonio Express-News)
Ricky Johnson stays in an RV park when not working in oil fields near Stanton. He works 10-to 14-hour days, 21 to 30 days at a time. Photo: (San Antonio Express-News)

Oil boom creating population boom

STANTON — Pipeline inspector Ricky Johnson of West Monroe, La., pulled into the Permian Basin Golf and RV Park three months ago.

West Texas dust covered rows of once-white trailers. A chain-link fence surrounded a pump jack, which bobs its neck and draws oil from the ground like a bird getting a worm. A drilling rig nearby pointed skyward.

“It can be a lonely life, especially if you’re shy,” Johnson said. “Most everybody is going to be from somewhere else, and everybody is going to be working.”

New census data show a population surge as the oil boom draws workers and families to oil fields around the country. Some of the nation’s fastest-growing communities include Midland and Odessa in the Permian Basin and three cities near North Dakota’s Bakken Shale field: Williston, Dickinson and Minot. The rapid increase in drilling in the Eagle Ford Shale has spilled into San Antonio.

But like a ranch gate that hides thousands of acres, numbers about population and jobs don’t reveal the details of life during a boom: $200-a-night hotel rooms, traffic, fatal wrecks, help-wanted signs or the dust that coats Johnson at the end of a shift.

He works 10-to 14-hour days, 21 to 30 days at a time. Then he drives home for four days to his wife, children and grandchildren. His 2006 Ford F-150 has 335,000 miles.

“It’s a major adjustment — all of this cactus and mesquite. I’m used to lakes and trees and pasture and pine trees. The biggest tree you see here is like this,” he said as he holds his hand out to the side, “and it’s got thorns on it.”

But Johnson hopes to stay 10 years, joining a new chapter in Texas energy history. Production peaked in 1972 around 3.45 million barrels per day. Oil busted in the 1980s, taking the state’s economy with it. The long decline looked like a decades-long obituary.

Karr Ingham, economist with the Texas Alliance of Energy Producers, thinks that the state’s crude oil production climbed to 2.7 million barrels per day by the end of 2013 and will cross the 3-million mark by the end of this year.

It’s difficult to find perfect comparisons of oil production, but that would place Texas somewhere in the neighborhood of Iraq, which produced just under 3 million barrels of crude oil and condensate in 2012, according to the U.S. Energy Information Administration.

The EIA last week said Texas alone produced almost 35 percent of U.S. oil last year.

“We will continue to eclipse all of those prior periods going into the ’70s,” Ingham said. “Where is it going to end up? Who knows?”

Oil production turned around in 2008 with the marriage of horizontal drilling techniques and hydraulic fracturing, first used successfully a few years earlier in the Fort Worth area in the Barnett Shale gas field. Fracturing pumps millions of gallons of water and chemicals at high pressure to break shale and prop open the cracks with sand, letting oil and gas flow up a well.

Joseph Pratt, an energy historian at the University of Houston, thinks shale drilling could be as transformational for Texas as the Spindletop strike in 1901 in Beaumont, which launched the state’s energy industry.

But Texas also has been there, done that before.

“Booms are here until they’re over,” Pratt said.

For now, around a quarter of all the world’s drilling rigs — 877 — are hunting for oil and gas in Texas. And most of them are in the Permian Basin and Eagle Ford. The fields are ancient seas that today produce light, sweet crude that sells for around $100 a barrel. Oklahoma is next with 193 rigs, according to the Baker Hughes Rig Count.

“There is a sense under all this that we’re looking at the beginning of a fracked world where all of this shale is fracked over 30 or 40 years,” Pratt said. “This is a stunning idea. This is a historic period.”

Martin County

Billboards along Interstate 20 declare, “Welcome to Stanton. Home of 3,000 friendly people and a few old soreheads,” and have been there for as long as anyone can remember.

Nothing much changes at Stanton Drug, a soda fountain open since 1951 and famous for its hamburgers — “I’m not lying either,” said 30-year employee Mary Green. But it’s busier these days.

“Yes, sir. How can I help you?” Green asks oil field workers who crowd in at lunchtime. “All the guys have been very nice, very respectful,” she said.

Brian Tennis, Shawn Putman and Joel Ramos line the red barstools at 11 a.m. Thursday and wait for a burger. They work for a production chemical company out of Midland.

“We’ve doubled or tripled in size the last few years,” Tennis said. “Everyone has done that.”

“We’re pretty much hiring all of the time,” said Putman, who pays $1,200 to rent a trailer on the outskirts of Midland.

They drive hundreds of miles each day through West Texas and eastern New Mexico, often passing through Stanton, the Martin County seat.

It’s an old railroad town and a good spot for cotton farming, although oil came along in the 1950s. Other than Loving County — the most rural county in the United States, which jumped from 78 to 92 residents in the past year — Martin County was the fastest-growing area of the Permian Basin. Its population increased to 5,312, up 11 percent from 2012 to 2013.

Nearby Midland and Odessa are among the nation’s fastest-growing metropolitan areas. Midland workers earned the highest average per capita income in the nation: $83,049. Martin County had a 3.4 percent unemployment rate in January, about half the national rate.

Patsy Simer, who works at City Hall, said she’s glad people can find jobs to support their families, but the litter around town that arrived with the new workers is making her crazy. It scatters across some of the vacant lots and hangs up in the scrubby grass. Takeout bags roll like tumbleweeds. “I think I’m becoming an old sorehead,” she said with a laugh.

Locals used to know everyone at the grocery store. Now it’s full of new faces, and the store sometimes runs out of basics such as bread. There’s a months-long wait for everything from a post office box to electricity hookups.

“We have people moving here from California just to work for the utility,” Simer said. During previous booms, the national economy was better. This time, people are arriving from all over the place. “This boom is way different than anything.”

The outlook

Martin County will likely keep drawing workers. Pioneer Natural Resources, which holds around 900,000 acres in the Permian Basin, considers Martin and Midland counties the core of the field, where it’s getting some of its best-ever results. Wells that cost $8 million to drill pay out in a year.

Timothy Dove, president and COO of Pioneer, said many things come together here: organic sediment that was buried deep millions of years ago has “cooked” at the right temperature to create oil and has the right pressure to allow more oil to move out of the rock. The shale has little clay content, which acts like Silly Putty. When it’s fractured, this rock shatters like glass.

“Those are the sweet spots,” Dove said.

There’s a dozen stacked target formations 400 to 500 feet thick each — thousands of feet of potential pay zone.

By the end of this week, Pioneer will have 26 rigs in the Permian Basin. It’s among the companies switching from vertical to horizontal drilling in the region, and it plans to spend more than $2.3 billion drilling there this year.

“The immensity is sort of the shocking thing of the Permian Basin,” Dove said. “We’re using new technology to develop old fields.”

Shale drilling is more of a factory process than anything in the oil and gas business before.

“There are fewer dry holes; so the risk is dramatically reduced,” said Ben Shepperd, president of the Permian Basin Petroleum Association. “In the early days, they’d hit about one out of 10, and it was not uncommon a decade ago for a company to be happy with four out of 10, meaning six dry holes. You weren’t in the oil business if you hadn’t hit a lot of dry holes.”

The new technology driving this boom means the industry is better at finding oil and drills more efficiently, he said.

In South Texas, the Eagle Ford arcs 400 miles from the border toward East Texas. Although the region has seen oil and gas production come and go, there hasn’t been a field like this one before.

The firm Wood Mackenzie has said that between 2012 and 2015, the industry likely would sink more than $116 billion into the Eagle Ford — more than the cost of developing the Kashagan offshore field in Kazakhstan, which has been called the world’s most expensive stand-alone energy project.

A study by the University of Texas at San Antonio estimated that in 2012, the Eagle Ford supported 46,000 direct jobs across 20 counties.

Surrounding cities, including San Antonio and Corpus Christi, have morphed into service providers, administrative centers and staging areas for the oil field.

By late 2012, the San Antonio Economic Development Foundation had counted 4,060 direct jobs in Bexar County, many of them with oilfield service giants such as Baker Hughes and Halliburton, which has a 150-acre operations center on the South Side.

The EDF hasn’t updated those numbers, but President Mario Hernandez said the city now has at least 5,000 direct jobs. A new 400-acre rail yard opened last week to service the Eagle Ford. At least a handful of oil and gas-related companies will open Bexar County locations for the foreseeable future.

“The big movement is over. We’re not going to see another Halliburton type of facility,” Hernandez said. “But it’s nice to be on the northern tip of the formation.”

Marshall Davidson Jr. of the commercial real estate firm KMD Studley expects a wave of warehouse and industrial construction in San Antonio and Corpus Christi. “The Eagle Ford activity has eaten up a lot of the inventory,” Davidson said. “There just isn’t any space anymore. It’s all tied up.”

McMullen County

They say you used to be able to safely lie down on Texas 16 in Tilden, the McMullen County seat.

Now a river of tractor-trailers and pickups pass by on their way to and from Eagle Ford wells. McMullen County produced 1.7 million barrels of oil in 2010. Last year, it produced more than 25 million. The county’s population rose 4.7 percent last year — the biggest jump in the Eagle Ford region — to 764 residents. It had a 2.7 percent unemployment rate in January.

At a restaurant called The Location — a play on the oil field word for a worksite — owner Ricky Alaniz can’t find workers locally, so he brings them in from Corpus Christi and houses them on-site.

“Free food, free rent, free whatever,” Alaniz said.

Last summer, he thought he could hire high school kids. But so many local families are getting royalty checks, mailbox money, that he couldn’t find any teens to take a job. “They have nicer trucks and have more money than I do,” Alaniz said.

Alaniz, 36, left a career as an emergency-room nurse to open The Location last year with his parents, former home builders. “This is the biggest risk we’ve ever taken,” he said. Everyone thought they were crazy for pouring money into land in Tilden and a restaurant the size of a fireworks stand.

It opens at 6 a.m., but trucks line up outside an hour before to wait for breakfast. Now Alaniz is building a 2,500-square-foot restaurant that will have flat-screen TVs and a deck with a river view.

Other businesses have sprung up, too.

Martin Greaney lives near San Marcos, but on Tuesdays, he parks on the side of Texas 16 in Tilden, with a truck decorated with bright yellow signs offering to repair windshield chips. $20 each. Cash only.

His other weekly stops in the Eagle Ford include Cotulla, Kenedy, Yorktown and Three Rivers, all places that have what Greaney needs.

“Oil,” he said. “And trucks.”

Belly dump trucks carrying loads of gravel — uncovered and losing occasional rocks along their route — and the generally lousy state of the region’s roads, many of which are unpaved, make for steady business. “I get a lot of regular customers,” Greaney said.

When sheriff’s deputies are working accidents, McMullen County School Superintendent Dave Underwood dons a fluorescent orange vest and holds a stop sign on Texas 16 just so school buses can exit the campus.

“The school is kind of the hub of the community,” Underwood said. “You stay worried.”

The school passed a $12 million bond program a few years ago to add new art and music rooms and build a new agriculture facility. Its population has doubled to 250, a change that meant going from seven to nine students per grade level to 20-something. It spent a year creating an emergency management plan. “If an oil truck fell over out front and exploded, what would we do?” Underwood asked.

The district is building four new homes for employees who otherwise wouldn’t be able to live there.

The drive to Tilden includes dozens of uninterrupted miles of mesquite sprouting vibrant spring growth. Outsiders can’t tell, but unincorporated Tilden is landlocked — surrounded by ranches measured in thousands of acres and the sort of multigenerational owners who have little interest in selling.

Some commercial development is happening, including construction of a hotel and Alaniz’s restaurant. But County Judge James Teal said it’s hard to imagine a developer building an apartment or homes. “It would be easier and cheaper to buy something in between San Antonio and New Braunfels,” he said.

A recent 6-acre sale for a truck stop was carved out of a 2,100-acre ranch. It sold by the square foot.

And 30 drilling rigs are in McMullen County. “If it takes 1,000 vehicles to service a well at any one time, that’s 30,000 vehicles,” Teal said. “Lots of vehicles.” All of the county roads are unpaved.

Tilden rents range from $350 to $450 a month for a slot in an RV park (bring your own trailer) to makeshift boarding houses that rent beds for $100 per night per man.

It’s the same across South and West Texas, with landlords courting workers with oil field salaries.

J.R. Gutierrez, a 23-year-old driver from Pleasanton, passed a sign recently in Cotulla in La Salle County: “House for Rent. Oilfielders Only. No Families.”

“I’ve heard of a lot of people getting kicked out of their rent houses because of the oil field,” he said.

The issues

Midland County Judge Mike Bradford said communities in other regions of the state now being roiled by booms, including the Eagle Ford, can look to the Permian Basin to get a hint of what the future might hold.

“We are the most mature basin in the state, and we’re probably the most active, because now they are in-fill drilling here,” he said, describing secondary drilling in the spaces between proven wells.

The population boom is showing up in the local court system, in particular in family court which deals with “family issues, kids and divorces,” Bradford said.

“We’re seeing those numbers just blow through the roof, both local people and those who have come to the region to work,” he said.

Shepperd, the Permian Basin Petroleum Association president, said there are infrastructure limitations of all kinds: the stress on highways, the need for more gathering and pipeline systems, the ability to find a seat in a restaurant. “I have a friend in town from New Mexico, and he paid $329 for one night in a very basic hotel room,” he said.

“And we have constraints on water, which is why you see such a move to reuse water. Some companies are recycling all of their water. Everyone is looking at ways to more efficiently use water. It’s in a limited supply out here,” he said.

Fracturing a single shale well takes millions of gallons of water, and South and West Texas are among the most arid regions of the state. Water recycling and the use of brackish aquifers for oil and gas is increasing, but there are concerns about the long-term water outlook in both fields.

Michael Adams, the city administrator in Stanton, said the increase in drilling is colliding with an ongoing drought, dropping lake levels, and more people and companies flowing into the area.

“Water is going to get to be a problem,” Adams said. “We’re seeing water use now that we used to see in the summer.”

Susan Redford, judge of Ector County which includes Odessa, said that city is limiting water usage and that in some parts of the county, people are trucking water because their wells have gone dry. “It’s drought, overuse and fracking,” she said. “It’s a huge problem, and we’re working as fast as we can to secure funding and water sources for parts of the county that have either contaminated water or no water at all.”

Another headache is the burgeoning county jail population which, she said, has resulted in constant monitoring by the Texas Commission on Jail Standards because the facility is often at full capacity of 667 beds.

“We had a jail that we thought would sustain us for 25 to 30 years,” she said. “Many of our inmates now are from the oil field, and many others are people who profited from them, by selling drugs to them.”

There’s also a sense that South and West Texas will have to band together to get the state’s attention.

So much of Texas has become urbanized that rural areas have lost their state representatives and senators. That leaves largely rural South and West Texas without political clout at the Legislature — something that became obvious in 2013 when they tried to get money for repairs for roads damaged by heavy oil field trucks. Although the tax bases have gone up, they haven’t covered road damage. Severance taxes when oil and gas are “severed” from the ground go to the state.

“There’s $12 billion in the economic stabilization fund, most of it is coming from South and West Texas,” said Thomas Tunstall of the University of Texas at San Antonio. “I think they sent $225 million back, with another $225 million for grants. It’s not being addressed. These communities rely on the benevolence or the whims of the Texas Legislature.”

And Texas has at least 200 ghost towns, some of them former oil towns that faded away when oil ran out and workers left.

By some counts, there are as many as 1,000 ghost towns in the state, Tunstall said.

Some South Texas cities are trying to figure out how to diversify their economies for the long haul, but it’s hard. “It’s like trying to build a canoe when you’re going downstream,” Tunstall said.

He said that when he talks to people in West Texas, they ask, “What else can we do that will bring us that kind of income? I’m not sure you could make a good case for diversification in West Texas.”

Oil and gas makes up maybe 10 percent of the state’s economy.

Ingham, the economist with the Texas Alliance of Energy Producers, estimated that oil and gas is 85 percent of the Permian Basin’s economy. “That is the metro area that is probably more connected to a single base industry than any other metro area in the country,” Ingham said. “It’s not that oil and gas affects the economy. It is the economy out there.”

The new norm?

Doug Robison, president of EXL Petroleum in Midland, and past president of the Permian Basin Petroleum Association, said the only constraints are working equipment and warm bodies.

“We have decades of activity in front of us. And practically speaking, we have unlimited capital waiting to pour into the industry. Our limitations are manpower, fracking sand and drilling rigs,” he said.

“If we had the resources to double the drilling rigs tomorrow, we would do it,” he added.

Ingham called the past few years in the Permian Basin and Eagle Ford extraordinary.

“I guess the question is, ‘Does the extraordinary become the ordinary? Does this become the norm, or does it revert?’ Anybody who pretends to know the answer to those questions — that’s just folly.”

Boom or bust, the industry is learning more about shale. A wealth of core samples and the measures of hydrocarbon content — electric logs and mud logs — are landing in universities and the network of geologic libraries across the state. “We continue to realize and gain a greater understanding of the sheer volume of crude oil and natural gas that remain underground somewhere in the state of Texas,” Ingham said.

And it’s creating job movement across the state. Aaron Miller, 24, arrived in Midland in May 2012 to work as a production engineer. He struggled for four months to find an apartment and ended up paying $1,650 a month. “We had talked about the possibility of me getting a hotel for a while,” he said. “Midland does not follow the rules of the rest of the world. People can sell their houses in 24 hours.”

Last August, he took a job with a different company in Houston, his hometown. “They got me out,” he said, laughing. Houston gained about 83,000 residents last year, more than any U.S. city.

At the Permian Basin Golf & RV Park, a ditch digger appeared Wednesday night to start creating the next 12 RV slots. There’s a wait list of 30 to 40 people. Someone came by recently and asked to lease 100 spots for three years — an impossible request.

“Pecos to Abilene, the RV parks are full,” said an employee from Virginia. “And here’s our backhoe,” she said, pointing between dusty RVs to the movement of equipment. “Life is good.”

The wind swept away the sound of the diesel engines, and the pump jack nodded in agreement.

jhiller@express-news.net 

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