Dark Side of the Boom

Prosperity in Texas has a way of rising and falling with the oil business. But not for everyone.

Dark Side of the Boom
Andrew Nilsen

It was like landing on the moon. The thought ricocheted through Joleena Malugani's mind as she took in the vast, dusty expanse of the corner of West Texas claimed by Midland and Odessa. Malugani was fresh out of college when she came across an Ector County Independent School District booth at a job fair in Oregon. The recruiter mentioned there was an oil boom going on in the area and the district needed teachers. Malugani was in a state with one of the worst unemployment rates in the country, her student loans would soon be due and she needed a job.

"People think that because there's a boom, no one is struggling, but for people who aren't in oil, it's very hard."

Raised on the West Coast, she'd never been to Texas. It would be an adventure, she thought. In August 2012 she lined up an apartment, packed what she could fit in her car and drove more than 1,600 miles for a teaching job in the middle of West Texas. The blazing lights of oil rigs and the guttering flames of natural-gas flares blotted out the stars long before she pulled into town.

Odessa sits on top of the Permian Basin, an oil-rich region 250 miles wide and 300 miles long that stretches across West Texas and up into New Mexico. Odessa and its sister city, Midland, went from being wide spots in the road to actual towns when oil was discovered almost a century ago. The wells came in big, and Permian production was the highest in the country for decades.

Joleena Malugani realized she couldn’t afford to stay in a boomtown on her teaching salary.
Laurie Pearman
Joleena Malugani realized she couldn’t afford to stay in a boomtown on her teaching salary.
The Permian Basin shale oil boom has fueled rapid growth in both Odessa and Midland, but it has also made home ownership almost unreachable for those outside the oil industry.
Mark Sterkel
The Permian Basin shale oil boom has fueled rapid growth in both Odessa and Midland, but it has also made home ownership almost unreachable for those outside the oil industry.

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Email the author at dianna.wray@houstonpress.com.

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In recent years, common wisdom held that the Permian Basin's best days were behind it, along with most of Texas oil. That was before the shale boom erupted. Fracking in the Barnett shale formation in North Texas, the Eagle Ford in South Texas, and the Wolfcamp and Spraberry shale formations in the Permian Basin led to an energy renaissance. Now more than half the rigs in the country are in Texas, and 563 of those — more than half the rigs in the state — are in the Permian, according to the Baker Hughes rig count. For places like Midland and Odessa, built on oil, dependent on oil and obsessed with the stuff, this was the boom they'd been praying for since the big bust in the 1980s.

But there's always a price. With prosperity comes inflation. Rental costs have soared along with the larger paychecks for some and the billions of dollars invested by oil companies. Odessa is the second-fastest-growing metro area in the country, and Midland is third, according to a U.S. Census Bureau population study. People have been flocking to the region, drawn by the promise of wealth and plenty amid one of the biggest oil booms in memory. Some are finding the modern-day American dream of overnight affluence, but the promise of oil doesn't always pan out. More people means more competition for jobs and places to live and increasing pressure on decaying local infrastructure. The definition of "American middle class" has always been vague, but it has become increasingly difficult to remain a part of that class on top of the Permian Basin if you aren't in the oil industry. People grasping the bottom rungs of the middle class have found themselves slipping, unable to keep ahold.

When the boom really started taking off in 2011, Erika Chavez, director of Odessa Links, the lead agency in the Odessa Homeless Coalition, was constantly on the phone, handling calls from people begging for help to stop evictions or looking for government housing (the wait list is currently six months to two years long). "People think that because there's a boom, no one is struggling, but for people who aren't in oil, it's very hard," she says.

She has seen two and three families living in single-family apartments, and shelter officials have reported cases of families living in cars. These people aren't even a part of the annual homeless count. They make too much money to qualify for aid, according to government standards, but they don't make enough to cover rent and bills, and there's little help for them.

As Ed Hirs, an economics professor at the University of Houston, puts it: "You'd best be a heart surgeon or an oncologist if you want to live out there and you aren't in the industry." There are increases in pay, but in some situations they aren't enough to close the cost-of-living gap created by inflation. People can work at fast-food joints making $16 an hour and still not be able to afford to live in the area.

Renee Kan, a homelessness specialist with Ector County schools, has seen the same thing. She even had a school counselor in her office one day a few months ago. The woman's husband had taken a job in the oil industry, but the company folded a few weeks after they arrived and the family was abruptly left homeless. "These are people you see every day and they look like everyone else, but they go home and it's a different story," she says. It's a new type of poverty, one that evades easy definition, says Linda Hamblin of the Midland Homeless Coalition. These aren't people who are simply poor. They are people who heard about the boom and came to town hoping for work, and they are people who have lived on top of the Permian Basin their entire lives, and the thing they have in common is they are barely getting by.

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26 comments
demoscum
demoscum

but they sure like that 2,50 a gallon gasoline

texasgurlqt
texasgurlqt

Let me tell you a little something about this article. Its very true and very sad. I was born and raised in Odessa. I married, had kids, and divorced there. Who ever said the average rent is $1300 doesn't know what they are talking about. They rent one room FEMA trailers for over a grand. And if you can find a decent place to live its closer to $2000. Don't judge till you've experienced it. A lot of single moms can't afford rent because as a woman you can't get a job in the oilfield. Glad everyone else's life is so great.

chuckiechan
chuckiechan

When I got out of college in the '70's - I walked right smack into a recession.


So I took my fancy degree in Economics, with my shiny minor in Business Administration, and got a job on an oil rig in Bakersfield. It was the hardest, hottest, most dangerous work I had ever done. I thought I was crazy. Until I got my first paycheck with 10 hours overtime. I'd never earned money like that before. I lived at home. Money was always just a number.


But because I really didn't fit in all that well, I stayed out of trouble and left with a fat bank account and all my fingers and toes.


I never looked back. Except in nightmares. :)


But if you want to work and get paid well, get dirty. My paychecks bought a lot of soap and Tylenol, and left me with stories to tell my grandchildren! 

pbody1
pbody1

I moved to Midland in 1976 to teach and coach as MISD was one of the 5 highest paying school districts in Texas and if I did not like teaching I could go to work in the oil industry as that is what paid for my college education.  After the second child was born in 77, it was harder to make ends meet teaching and coaching so in 1979, I quit and went to work in the oil fields of W. TX.  I went through the first bust in OK City in 1983 and moved back to Midland and worked the oil fields until it busted in 1986.  Back into teaching until 1995 when I moved back to Midland and went back into the oil business.  I love working in this industry.  There are great people who will do anything for you in Midland/Odessa.  There are very few natives here, most have moved in from somewhere else so they are more friendly than say the folks in Tyler Texas.  The oil field is not a typical job.  Long hours, lots of miles on the road.  Hours or days on location.  It is something new just about every time you go out on a job in the service business.  You see the sun rise and set at the same location.    The money paid is better than anywhere else.  The jobs are available in all sorts of disciplines now and if you make the company a good hand, they will take care of you.  However like some of these examples, the oil field is not for everyone.

kcvxx
kcvxx

Cry baby article for those who want everything handed to them on a silver platter.  Live with your parents or a friend until you can afford an apartment or trailer house.  Don't have kids until you can afford to feed, shelter and care for them.  Teach them to work and not to whine and they will do fine.

mcdallas
mcdallas

"Rents are one of the main problems for those who are struggling.".


Average rent (for the month of September, 2013) was $1,391 in Midland, TX.


By comparison, average rent (September 2013) in Dallas was $1,372.

mcdallas
mcdallas

"People grasping the bottom rungs of the middle class have found themselves slipping, unable to keep ahold."


Welcome to America.  Welcome to the world.  

cajunscouse9
cajunscouse9

Booms always goes bust. I've lived through a few. One problem with Midland-Odessa is location. When your in the middle of nowhere, it's more expensive. I've lived in Northwest Louisiana where we have had the Haynesville Shale boom. A larger shale than that in west Texas. Prices here have not skyrocketed. Granted in NW Louisiana there is a large medical community and that helps to offset the jobs balance. Anywhere there is a thriving economy in a remote area you will find high prices. Alaska and the Dakota's are the best example. Supply and demand.

A mention in the article was made about progressive taxes. Well, that's never worked and never will. Taking from those who have and giving to those less fortunate never works. It would be a disaster in an area like Midland-Odessa where so many people are what can be called migrant oilfield workers. They'll simply move to another boom, taking their taxable income with them.

It sounds as if some of the people mentioned didn't research the area enough before moving. A little homework will go a long way. I've turned down jobs in the oilfield in areas that have a high cost of living in favor of less pay in another location. And let's not forget, while some may feel the pinch of being left out of the boom, there are many many others that it has been a Godsend to. People lifted from poverty. But they need to save that money because booms go bust and a bumper sticker my dad had on his truck in 1986 can still ring true.

"Dear God, send us one more oil boom. I promise not to piss it all away next time."

texasgurlqt
texasgurlqt

Don't judge until you have lived it. I was a stay at home mom with a husband who make a six figure salary. I grew up in odessa , married, and had children there. But when my marriage fell apart and he kicked me to the curb. I was left penniless. Try raising two kids, going to school, and working full time with no child support. Rent there is $1600 plus for a small two bedroom. If you can find an apartment at all. They brought in FEMA trailers and are charging $1200 a month. Luckily I moved and I don't struggle day to day anymore. But I'm glad your life is so great

texasgurlqt
texasgurlqt

You have no idea what you are talking about. I was born and raised there and I worked and did not do fine. They rent FEMA trailers for $1300 a month because there is no housing. If you do find an apartment its $2000 plus. I could afford the children I had until my husband filed for divorce. Don't judge until you've been there.

texasgurlqt
texasgurlqt

That figure is way off. They rent FEMA trailers for over a grand. Average rent is $2000

mommabearg
mommabearg

@mcdallas As someone who recently had to look for a place to rent in the Dallas area, I can tell you zillow is full of crap. Almost every listing I checked out was $200-$300 higher than what the site was advertising. I looked through three or four websites and got the same thing. Advertised online for one price, but always higher once you actually spoke to someone.

mcdallas
mcdallas

@mommabearg @mcdallas Maybe suggest an alternate source instead of just complaining about the one being used.  Even better: find a source that backs up your argument...

mcdallas
mcdallas

@texasgurlqt Yet you don't have any sources...  So let's just have a big flame war about our "feelings" since "facts" don't have any place here.

texasgurlqt
texasgurlqt

Why don't you call around to some apartments there. I lived there. I'm not stupid. I was paying $1500 for a two bedroom apartment and our stairs were falling apart. I guess your one of those idiots that believe everything you read on the internet. They wouldn't have wrote and article about it if it wasn't a problem

texasgurlqt
texasgurlqt

The fact is I did post proof and I lived there!!!! You have one website that is wrong and think you know more than someone who was born and raised there. Why don't you call some apartments there and see for yourself

 
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