Shale towns in Texas grapple with growing growth as oil tanker fears erase

ODESSA, TEXAS (Reuters) – In western Texas, at the center of the US oil boom, about 3,800 Permian High School students are crammed into a campus designed to accommodate 2,500 people, with 20 portable buildings to help overload.

School authorities were expecting a drop in registrations after the latest crash of oil prices, starting in 2014, but it continued to rise – a sign of growing resilience of the country's oil economy. the region, such as Exxon Mobil (XOM.N), Chevron (CVX.N) and other majors continue to invest billions of dollars in long-term investments.

For most of the last century, oil funds flocked to this region as a rising tide during times of economic prosperity – but locals had enough reason to know they would be evacuated again at the next collapse. This cycle has always led managers, developers and voters to be careful not to over-invest during good times, from school construction to roads to housing.

This hesitation quickly fades as major oil companies engage more and more in the Permian basin and residents tire of traffic jams on previously rural roads, long waits for doctor's appointments, expensive housing and overcrowded schools. Local governments, industry and foundations come together to fight the overwhelming infrastructure and public services in the region.

"When you have more students, you need more teachers," said Danny Gex, director of the Odessa School, which was made famous by the home of the Permian Panthers football team in the adaptations of the book and the screen of "Friday Night Lights".

Gex said Texas had a shortage of teachers across the country. "When you're in the desert, it's much harder to find them."

Also in serious shortage: housing. The median price of a house in Midland, $ 311,000 in April, was higher than any other Texas city, with the exception of Austin's state-of-the-art technology center, according to the data collected by Texas A & M University.

Ruben Garcia, a former convenience store manager, has visited the area and is now making between $ 2,000 and $ 2,500 a week by hauling sand to fracking sites. But he had to sleep in his truck until he could find a RV for rent.

"I had to go where the money is, and the money is here," Garcia said.

Midland City, the local hospital district and other employers plan to band together to build apartments for the workers, said Jerry Morales, mayor of Midland, de facto capital of the Permian. In the nearby city of Odessa, the school district has considered buying a hotel to accommodate new teachers.

"It's crazy to think that," said Gex, the principal.

STAY POWER

Of course, the oil industry still has its ups and downs, just like any activity involving global commodities subject to rapid market changes.

Some of the smaller pioneering producers of shale drilling in the Permian, such as Concho Resources (CXO.N), Laredo Petroleum (LPI.N) and Whiting Petroleum (WLL.N), oil prices in West Texas have dropped 16% and natural gas has dropped 36% over the past year.

But the largest oil companies in the world are increasingly taking control of the shale industry in Texas, and their drilling plans – sometimes sketched in decades – should be able to withstand the usual price cuts.

This means that they will have to attract more staff to live permanently with their families in cities such as Midland and Odessa, rather than depending on "work camps" for temporary backpackers or resorting to training programs. training of temporary workers.

In Midland, a group of local foundations created by affluent families in the region, as well as a consortium of energy companies, recently donated $ 38.5 million to fund 14 charter schools with no tuition fees to ease the stress of local classrooms.

"The mentality is changing," said Mayor Morales. "There are those who understand that we are growing up and that we need these things."

But it is a difficult race to catch up: "We are late because we have never invested in ourselves".

On the Permian side in New Mexico, local governments, schools and foundations partnered to build a sports complex with a $ 63 million water park in Hobbs. Hotel taxes collected by visiting energy workers pay some of the operating costs of the facility, said Hobbs Mayor Sam Cobb.

Hobbs' next proposal is to create a $ 60 million professional high school that would help recruit welders, electricians and other skilled workers. Oil executives will consult with each other on the program, offering an overview of the skills they need for new recruits, he said.

"I think there's more sustainability because all supermajors have come back to the area," Cobb said.

While many local officials and civilian officials say the region has definitely left its cycle of economic expansion and slowdown, others remain cautious. Alan Herig arrived in Midland in 1977 to sell oil equipment and then opened an office supply store. He moved from Houston to Houston to paint houses after the oil price crash.

"Midland has become a ghost town," said Herig, who now owns three hotels in the area and believes that hard times could happen every day.

Still, Herig understands why city officials and citizen groups are scrambling to improve local infrastructure and services.

"Midland is far behind," said Herig. "They must invest."

BUCKETS AND FOLDING TABLES ORANGE

The last shale boom, which began about three years ago, created jobs and wealth, but also created many problems in everyday life.

Kaes Van't Hof, a Midland resident and energy sector leader, struggled to schedule an eye doctor appointment for new contacts before her wedding earlier this year.

"Here, simple things have to be planned well in advance," Van't Hof said.

Max Campos, a tattoo artist based in Odessa, recently sold his motorcycle after concluding that he was no longer sure of riding heavy trucks.

Odessa, a city of 120,000 residents, drew unwanted attention last year after a school teacher equipped a classroom with orange buckets and folding tables due to lack of chairs and desks. The school found pictures after student photos using makeshift furniture became viral online.

Several groups were formed to effect change in the region and local officials found that voters were more willing to approve new spending on services such as schools and roads.

Priority Midland – a long-term planning initiative formed this year by government officials, businesses and philanthropy – is planning efforts to exit the vote in order to push for increased funding for school and university funding. A possible rise in sales tax to pay for hospital services or improved roads, said Morales.

The Permian Strategic Partnership, a group of 20 energy companies operating in the region, promises to spend $ 100 million to promote training, education, health care, housing and roads. The partnership contributed $ 16.5 million to the charter school initiative, which will open its first campus in August 2020 and plans to provide public education to 10,000 students over time.

Travis Stice is one of the organization's members, Midland's Diamondback Energy, part of the Permian's fast-growing businesses.

It is time for the community, he says, to have confidence that the oil industry is here to stay.

"We have allowed ourselves to stay within limits by thinking," Do not invest during the boom times because the economic crisis is approaching, "said Stice.