Eagle Ford drilling fuels income surge for all, despite recession

The Eagle Ford Shale is turning out to be more than an oil boom. It’s also a shot in the wallet, pulling up personal income in counties across the region — some of the poorest in the state.

With a sudden abundance of well-paid oil field jobs, counties with Eagle Ford Shale wells permitted or in production saw an average increase in per capita income of 13.62 percent between 2008 and 2011, according to data from the U.S. Department of Commerce’s Bureau of Economic Analysis.

Texas as a whole saw an increase in per capita income of 1.34 percent during that time period, which included the last recession. Average pay reached $40,147.

The average Eagle Ford county’s per capita income increased from $28,148.92 in 2008, when the boom started, to $31,893.92 in 2011, the latest year for which data is available.

In some counties, income growth outpaced Texas as a whole even more dramatically.

“There’s full employment, literally,” said Larry Dovalina, city administrator in Cotulla in La Salle County, where personal income rose 31 percent in the wake of the oil boom. “Everybody who wants a job has one.”

Dovalina said all employers have had to raise wages to try to retain workers, even for service jobs. The local McDonald’s has a “help wanted” sign with pay at $10 an hour, and Dovalina said each time a new hotel opens to cater to energy companies, maids are able to jump to new jobs at higher pay.

“It’s not just the oil field,” Dovalina said. “It’s all being pushed up or pulled up.”

Dimmit County had the biggest percentage jump in average income, at 36.4 percent. McMullen County’s average personal income jumped 35.9 percent between 2008 and 2011.

Just one county, Bastrop, which is on the eastern edge of the shale play that has seen relatively little oil field activity, saw average personal income decline.

In general, “help wanted” signs have become a fixture across the region. In Karnes County, where personal income rose 15 percent, a sign on U.S. 181 at The Lodge at Karnes City says “Now hiring food service workers.” The new 160-bed location has been rented out for about 18 months to an oil field service company, and provides meals, laundry service and entertainment such as media rooms.

Chris Kemp, hospitality manager for Cotton Logistics, a Katy-based company that provides worker housing at The Lodge and other sites throughout the shale play, said that even food service jobs can pay as much as $12 to $15 an hour.

“This is an opportunity that didn’t exist before, and it’s open to everyone,” Kemp said.

Kemp, who has a background in hotel management, said he was unemployed for about a year and a half before joining Cotton Logistics, and counts himself among those with a new career path thanks to the Eagle Ford. “It’s another job that wasn’t here before,” he said.

Thomas Tunstall, a professor at the University of Texas at San Antonio who studies the play’s economic impact, said the income increases have been sharp due to the capital-intensive nature of the energy industry.

Companies spend so much on drilling rigs and equipment that the cost of hiring workers pales in comparison.

“They’re spending most of their money on the rigs and the parts. There’s lots and lots of capital,” he said. “They have to watch their labor costs, but they want good people. They’re dealing with expensive equipment and they want to minimize accidents.”

It’s a different set of economics than other businesses, where the biggest expense is paying employees.

“There are a lot of things that can go wrong on a well site,” Tunstall said. “You want the best, most competent people you can get.”

LaSalle County Judge Joel Rodriguez Jr. said the rise in income has been matched by a rise in the cost of just about everything.

“The cost of living is high. Rents are high,” Rodriguez said. “The price of homes has skyrocketed.”

For people living on fixed incomes or not working in the energy industry, the boom can be a burden. Rents are typically well above $1,000 a month, roughly double what they were a few years ago.

“Their income is not changing. It’s a burden on them,” Rodriguez said. “It’s a burden to be in a rental home.”

Truck driver Patty Gebbie has lived in Three Rivers about 18 months after moving from Washington. She sometimes works as much as 30 hours of overtime per week, and at one point was pulling in $6,000 to $7,000 a month in overtime.

But she said that everything has grown more expensive, including the $3 sandwich at the local café that now costs $7 to $8, which makes her worry for the longtime residents.

“The people with kids in schools who are trying to pay rent are really suffering,” she said. “And once they go up, the prices never go back down.”

What they need to remember is what the Mexicans learnedd a long time ago: you can feed a lot of people on beans, rice, and cornmeal. Then the money you save, you can buy fruit and vegetables, or you can grow these in the garden. Trouble is, many folk have forgotten how to do what their grandparents could do.

“...Trouble is, many folk have forgotten how to do what their grandparents could do....”

Very good post, Robby. I agree wholeheartedly. I’ve been working in the Eagle Ford going on 3 years now. I’ve seen so many of these folks come here to work, work hard with lots of OT hours, make some really good coin and then turn right back around and spend it just as fast as they made it. They have an opportunity to lift themselves outta debt and dependence and, instead, spend on “stuff” they really could do without. When I first came here, we were barely making ends meet. We were doing ok, the bills were getting paid etc., we were just not getting anywhere on our debt. Since working here, I’ve manged to keep my expenditures to the bare minimum as much as possible. My wife and I set up a financial plan that allowed us to pay down our debt as quickly as we reasonably could, and start saving a little bit for the future. We’re now in much better financial shape than we’ve ever been, and we can thank the Eagle Ford for that. The problem now, is how to keep the evil odongo and his vile “takers” from stealing any more of it from us.

My Dad was in the oil business many decade, and many decades ago. Even back in the ‘20s, roughnecks could make as much as auto workers and a heck of a lot more than as a farmer. Even then, they would blow their wad on stuff they didn’t need or in a honkytonk. My dads ran a small drilling company and he had the worst time with good men who would not stay sober and left their families go hungry.

“...he had the worst time with good men who would not stay sober and let their families go hungry.....”

Unfortunately, Robby, it still goes on today in this business. It’s rough, hard men doing hard, rough work.
I’ve seen a lot of good workers that just couldn’t stay sober or stay off the dope so they get let go. They just can’t shake it. It’s a shame but there is nothing you can do. It takes a lot of resolve and willpower to work this far from home, with nothing out here but a pocketful of cash to stay away from the honky-tonks, hookers, new truck dealers, drug dealers, you name it, etc. It certainly helps to have a good woman back home supporting you, some strong Christian values, and not just “talk the walk”, but “walk the talk”. :) And even then, it’s still pretty tough at times.

"I may need to get in on this if there are jobs for people like me in their 40’s out there."

I suspect there are. My best pal from high school has worked offshore Louisiana almost all his life. He will be 66 this coming year, and is just getting ready to think about retiring. He had a college education and a teaching degree, but liked that "two on, two off" more than teaching snot-nosed kids. I think he started in his late 20's.

Well, best of luck to you. The oil field has been a great avenue for self-improvement for a long, long while. Still it is hard work. Do you or your wife have to boil your work clothes to get the oil out? Or do the new detergents cut the grease. Watch your hands. The machinery will eat them .

If he is smart, willing to start from the bottom, and physically able to to the job, he can do it. My dad once hired the nephew of a friend who had been a bank clerk and who lost his job when he was in his thirties. He came the first day wearing dress shoes because he had no others. One of the roughnecks had an old pair of work shoes that fit him. He was a keeper. He even impressed my Dad who was the hardest worker I have ever known. Within six months he was a driller on one of our ten rigs.

“...Well, best of luck to you....”

Thank you, Robbie. Much appreciated.
On today’s jobs, we have to wear FRCs (flame resistant clothing) and things are done a little different with little or no oil to the environment or workers. We tend to get a whole bunch of dirt/grime/equipment grease on us though.
FRCs are supposed to be washed inside out and re-treated after so many washings. I dunno if everyone does it or not. I try to keep my stuff clean and just replace it about once/year with new stuff unless it gets really bad, then I’ll just outright replace it early. Since I’m a senior field engineer, I don’t get into the “down & dirty” everyday like the rig hands and roughnecks do. Those guys can get pretty darn grimy in the run of a day. However, there are times when we have technical issues that I’ll get right down in it with them; dirt, grime and all. I’ve been told that “I’m one of the few ‘office jocks’ that will do that.” And over time, it has created a kind of “unspoken respect” between us. We have some pretty good guys working out here...practically hand-picked. BTW, I just turned 62 and I figure one more year of it, assuming my health holds up, and I’m going to “hang it up” and retire,...maybe...this work gets in your blood...LOL.

Good that you are willing to jump in. My Dad always kept work boots and coveralls in his car. Since he started out as a roughneck, and since he had been a farmboy, he knew how to do every job on the rig and he could handle a wrench with the best of them and if someone did not show up for work, he would do the job himself until they rounded up someone else . He never said anything like “a leader leads from the front,” but he did. At the peak of East Texas drilling he was employing almost 100 men as a contractor for Shell. Just before he died, he had an invite to look at an off-shore rig, and for several days —he was past 70—he was as giddy as a kid about to go to a bowl game. He was deflated when it didn’t happen. Does get into you blood.

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