MIDLAND, Tex. — In the desolate outskirts of this thriving West Texas oil town, two men recently showed off a new 400-square-foot wood cabin they hope to rent out for $1,500 a month. A planned expansion includes spaces for 30 recreational vehicles and nine additional cabins — and maybe more.
“This morning, the boss man was asking if we could duplicate this across the fence,” said Danny Wallace, who works for Jones Brothers Dirt & Paving Contractors, the company developing the site.
Housing as expensive as New York City’s has become the norm in Midland, amid an oil boom that is rapidly reshaping the area. With oil prices hovering above $80 a barrel, more than double their level of early 2009, workers have flocked here from elsewhere in Texas and the nation, lured by jobs working on rigs or driving trucks. But the resulting housing shortages, traffic and strain on schools has some residents shaking their heads.
“I was born and raised here in Midland, and it’s never been like this,” Kenney DeLaGarza, a building inspector for the city, said as he stood on a gravel road beside a patch of land covered with trailers. Fields where his parents once took him to shoot fireworks, he said, have turned into housing developments — sometimes with pump jacks in the backdrop.
Booms — and busts — have been a way of life here since oil began flowing from Permian Basin wells in the 1920s. Midland is where George H. W. Bush and George W. Bush made their names in oil. The mayor, Wes Perry, is also an oilman, and he sometimes takes calls about city matters from his EGL Resources office.
Today, the Permian Basin accounts for 14 percent of the nation’s oil production. That is far more than the combined output of other Texas fields, including the Eagle Ford Shale, and more than the Bakken Shale in North Dakota, another major drilling region.
This latest boom has been driven by hydraulic fracturing, or fracking, the technique of shooting water, sand and chemicals deep underground to crack hard rock and release oil. (The Permian Basin also produces natural gas, but some gets flared off, partly because of a pipeline shortage.)
Fracking has allowed drillers to produce more oil than ever before, although the wells are more expensive, according to Tommy Taylor, the drilling manager with Fasken Oil and Ranch, an oil company that is building a new headquarters on Midland’s northwest edge. Also, fracking’s demand on aquifers has added to deep concerns about water availability in a region so parched that oil field trucks can kick up clouds of dust that look like smoke.
Amid the resurgent drilling, Midland officials estimate that the city’s population has swelled by about 8 percent in the last two years, to about 120,000. There is talk of eventually hitting the 150,000 mark. Unemployment in Midland in May stood at just 3.8 percent — the lowest for a metropolitan area in the state — followed by nearby Odessa, at 4.3 percent.
The oil fields offer generous pay, starting at around $15 an hour, Mr. Taylor said. That leaves other businesses scrambling for workers. Along a half-mile stretch of the Andrews Highway, an artery through the heart of Midland, “help wanted” signs are ubiquitous — at Long John Silver’s, Pizza Hut, Wendy’s, Whataburger, CVS and the Way Out West Steak & Buffet.
“If you can’t get a job in Midland, Tex., you’re not going to make it,” said Jack Naumann, a geologist who has lived here since 1969.
Even as more workers arrive, there is no guarantee they can find housing. That is why Jones Brothers, the company Mr. Wallace works for, is building the two-bed cabins and renting out trailer spaces with utility hookups.
Jones Brothers, whose products include crushed limestone, is thriving. (“We sell everything we can crush,” Mr. Wallace said.) But it is struggling to find places to house prospective workers, who call about jobs from as far away as Indiana.
“We have to tell them we’ve got the work, but we’ve got a problem with living conditions,” Mr. Wallace said. He plans to reserve some spaces in the new development for Jones Brothers workers and rent out the rest; a Craigslist ad, placed in late June, plus word of mouth, yielded at least 50 calls over two weeks, mostly for the R.V. spaces, he said.
Besides subdivisions, cabins and R.V. parks, which are sometimes called “man camps,” hotels are going up rapidly. On Midland’s western edge, near the ballpark that is home to the city’s minor-league RockHounds baseball team (which projects record-breaking attendance this year), four hotels are being built or expanded, essentially within sight of one another.
At the Sleep Inn & Suites, workers are rushing to complete a new wing in time for a major oil convention in October. “All the rooms that you see are rented,” said Dwayne Felker, who works for the construction company Shell Craft, speaking in the still-skeletal interior above the sounds of hammering and clinking.
The hotels and other new developments could even start to meld Midland and Odessa, which lie 20 miles apart but vie with each other on and off the high school football field.
“ ‘Modessa’ — it’s going to happen eventually,” said Mr. DeLaGarza, who does frequent inspections at a vast new subdivision near the ballpark.
Some existing neighborhoods are wrestling with a different issue: drilling. Over the past 18 months, the City Council approved more than a dozen permits for drilling within city limits, and at least eight more are up for consideration in the next two months, according to John James, a councilman. Only a few have been rejected — one of them in the northwest Midland neighborhood where Craig Tellinghuisen, a retiree who worked in the oil business decades ago, lives.
“One of the reasons that my wife and I moved out here was the peace and quiet and the country environment,” Mr. Tellinghuisen said of the area, which he moved to 11 years ago. Now, he is concerned about truck traffic and the noise of drilling. (The oil company has reapplied for the permit.)
Regionwide, a surge in road accidents has raised concern. A recent report from the Midland-Odessa Transportation Alliance found that the traffic fatality rate for the Permian Basin area in 2010 was two and a half times higher than in the rest of Texas — and crashes and deaths have only climbed since.
“We’re very concerned,” said James Beauchamp, the president of the alliance, which launched its Drive Smart campaign last week, with notices online and around town. In one especially awful week in June, he said, there were nine traffic deaths.
Even schools are feeling the strains of the boom. The Midland Independent School District has about 22,500 students and is adding about 750 a year, according to its superintendent, Ryder Warren. The district plans to seek a bond issue that will probably include money to build three elementary schools, Dr. Warren said. Meanwhile, dozens of portable classrooms have been set up.
All of the challenges have some people wondering when the boom is going to end, or at least ease. Longtime Midlanders say a bust is inevitable — it is just a matter of time. Oil prices have fallen more than 20 percent from their highs of around $110 per barrel in February.
Mr. Taylor, the Fasken drilling manager, said that the recent price drop has already had an impact, and that for fracking — an expensive process — to continue, the economics must work.
“If they don’t,” he said, “people will quit drilling wells.”
source: nytimes.com
