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Fracking brings oil boom to south Texas town, for a price

Since 2008, hydraulic fracturing oil drilling technology has been tapping the rich Eagle Ford shale formation, transforming Carrizo Springs in good ways and bad. Nobody knows how long it will last.

February 15, 2014|By Molly Hennessy-Fiske
  • A rig drills for oil and gas in south Texas’ Eagle Ford shale, a rich sedimentary rock formation 50 miles wide and 400 miles long.
A rig drills for oil and gas in south Texas’ Eagle Ford shale, a rich… (Eddie Seal / Bloomberg )

CARRIZO SPRINGS, Texas — Just a few years ago this was a sleepy town of 5,600, and people eked out a living from the land. They farmed, worked ranches and leased their property to hunters to make a few dollars.

Now, an oil and gas boom is transforming the economy of south Texas, turning Carrizo Springs into a busy city of at least 40,000.

Texas oil companies, tapping a vast formation called the Eagle Ford shale, have nearly doubled oil production over the last two years and by next year are expected to produce 4 million barrels a day. That would catapult Texas ahead of Iran, Iraq and the United Arab Emirates to become the fifth-biggest oil producer in the world.

Property owners who have seen the state's fortunes rise and fall during oil booms in years past — before the aging oil wells that first spurted "Texas tea" went dry — are suddenly making new millions selling and leasing, earning them the nickname "Eagle Ford Hillbillies." The region is set to reap more than $90 billion in the next decade.

But the newfound prosperity comes at a price. The highway leading into Carrizo Springs is cracked and pitted from the heavy traffic. Sexual assaults, thefts and crashes are up. Women frequent parking lots selling perfume — a pretext for prostitution. There's a new strip club.

The sheriff has hired 15 deputies — doubling the force — and complains that Mexican drug cartels are taking advantage of the chaotic atmosphere, using fake oil trucks to conceal and transport narcotics.

Unemployment dropped from 12% to 4% countywide in the last five years. Help is wanted at the nearby Oil Patch Cafe, Dairy Queen, Church's Chicken and pretty much every restaurant around. Roadside signs advertise pipeline supply services, shale tank trucks and temporary oil field housing — complete with gourmet chefs and maid service.

At quitting time, fleets of white energy company trucks occupy the parking lots. Companies have pitched more than a dozen military-style man camps, or temporary housing complexes, spartan and secure as overseas military bases. RV parks multiplied alongside them, from two at the start of the boom to 70.

The number of hotels tripled. So did membership in the chamber of commerce, and city sales tax revenues.

Mayor Adrian DeLeon, who has been expanding his convenience store and restaurant to cater to oil workers, is talking about starting a community college.

The challenge of managing a boom is similar to managing a drilling operation, said Michael Webber, deputy director of the University of Texas at Austin's Energy Institute: "How do we harness as much good from it without getting left with just a bad residue?"

The trick, he said, is not to drill too hard too fast. Instead, smart drillers milk the oil field slowly for all it's worth.

"If the cities are smart, they'll do the same thing," Webber said.

The boom has enriched scores of small towns in more than a dozen rural counties in south Texas not known for oil and gas exploration. Oil had a brief heyday here in the 1980s, but has never defined the economy and culture the way it has in Houston and West Texas.

That changed in 2008, when new drilling technology for hydraulic fracturing, or fracking, tapped a rich Texas shale formation running 50 miles wide and 400 miles long. It was named after the town where it was discovered: Eagle Ford.

As of last month, 5,021 oil and 2,468 gas wells had been drilled across the shale, with an additional 5,504 permitted, according to the permitting agency, the Texas Railroad Commission. Back in 2008, only 26 permits had been issued for Eagle Ford shale.

Drilling operations are visible from space. At night a golden arc of light — from natural gas flaring and electrical lights on drilling platforms — sweeps east from Carrizo Springs to the heart of Texas. By 2022, the deposits are expected to generate 128,000 jobs and untold side effects across the region.

"This is transitional for south Texas — it gives us the opportunity to create new communities," said Leodoro Martinez Jr., who leads the Eagle Ford Shale Consortium, a group of local leaders.

Eagle Ford is not the only shale boom in the state. West Texas, traditional oil country, is booming again thanks to its own shale in the Permian Basin.

Texas companies were producing 2.7 million barrels of oil a day last fall — more than every other top oil-producing state, including Alaska, California, North Dakota and Wyoming, according to the U.S. Energy Information Administration. Last week, officials at one of the largest oil producers in the country, Occidental Petroleum, announced plans to move its headquarters from Los Angeles to Houston.

Texas oil production is projected to surpass 3 million barrels a day this year and to reach 4 million a day next year.

It's not clear how long the Eagle Ford boom will last. Some experts forecast a decade of productive drilling, others 50 years.

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