Policymakers and industry leaders from across the state gathered at UTSA’s Downtown Campus for a Texas Tribune sponsored symposium on Oct. 31 to discuss the shale boom that has brought thousands of jobs and millions of dollars to Texas.
“We need to frack,” said Texas commissioner Barry Smitherman on fracking’s positive impacts on Texas. “If we don’t frack, then we go back to importing.”
The Eagle Ford region alone has brought $87 billion in production revenue, 155,000 jobs and $2.2 billion in local and state government funds to the Lone Star state.
The Center for Community and Business Research, part of UTSA’s Institute for Economic Development, reported that Bexar County’s economic benefit from the Eagle Ford area was over $3 billion. Additionally, nearly 14,000 jobs related to the shale boom provide full-time employment to Bexar County citizens.
However, this newfound prosperity is not without shortcomings.
“Everything that happens in Eagle Ford results in a tradeoff for another problem,” said Don Tymrak, city manager of Karnes City. “We look at the prosperity (and) it’s sort of a vicious cycle. We take that step, but it’s a cautious step.”
The rapid development of oil and gas production facilities requires rural Texas towns to match the infrastructure demands of heavy industry. Some of these concerns include better roads, increases in water availability for hydraulic fracking, new housing and adequate educational facilities.
However, constant automotive traffic related to shale oil and gas production destroys roads and puts a strain on community living as small towns try to maintain a hospitable environment.
Jerry Morales, the mayor of Midland, explained that the oil and shale boom has created a surge in construction that has increased the cost of living in Midland. Having experienced a shale boom, Midland serves as a model for rapid oil and gas related economic growth.
According to the U.S. Census Bureau, the 2008-2012 median household incomes in Midland ($59,391) rests above the state average. Further, the Bureau of Labor Statistics reports that Midland’s unemployment rate as of Aug. 2014 is 2.8 percent, over 2 percentage points less than the state unemployment rate.
Morales reported that last year Midland built 899 homes, and it will continue to build while the cost of living remains above the state average. The cost of a one-bedroom apartment in Midland ranges from $1100 to $2000 per month.
Although Midland seems prosperous, Morales stipulated that not every individual in Midland profits from the lucrative oil business. Thus, many citizens must adapt to increased living costs while the city allocates its resources to accommodate the oil and gas industry, which leaves citizens’ needs as a subsidiary concern.
“It’s disappointing,” said Morales. “Although Midland is doing well we are still strapped because we are building roads and helping the community. We cannot rely on the state or federal government to help.”
Morales and Tymrak both stressed the importance of government assistance to preserve roads and highways so each city can focus on maintaining an environment favorable to citizens. Morales explained that the shale boom offers high pay rates that surpass the salaries of teachers and other local workers.
This incentive for more money has resulted in people leaving their jobs and ultimately has caused oil and gas employers to compete for personnel. Because a bulk of city funds maintains roads, Midland’s long-term employers struggle to match the high wages of oil field work. Consequently, high school graduates tend to choose lucrative oil-field work over continuing their education.
“We (need to) look beyond the job, focus on quality of life and take a holistic approach to education,” said State Senator Judith Zaffirini (D-Laredo). “We (need to) ensure that we prepare the young people for a better future and recognize what else they need to learn besides to hold a job.”
Zaffirini proposed offering high school students an oil and gas curriculum so that, upon graduation, students are prepared for the workforce and can work toward establishing a career rather than a job.
State Representative Mike Villarreal (D-San Antonio) suggested utilizing House Bill 5, which allows flexibility in school curricula at the local level to create pathways for students to higher education. The bill would shift the schools’ accountability standards from focusing on standardized testing scores to focusing on the schools’ graduation rates and their abilities to send students to college. Employing House Bill 5 would give students routes into related oil and gas fields such as petroleum engineering.
The shale boom will continue to generate revenue and expected to last into 2023. However, the longevity of shale is uncertain.
When asked what message should be sent to state legislators, Tymrak responded, “(It’s the) same message we have been carrying for years: there’s a golden goose in Eagle Ford Shale, and the state is not doing anything about it. You can’t expect this golden goose to keep laying.”