That’s the question that keeps dogging the South Texas oil and gas field.
Even as thousands of workers and major oil and gas companies flood into the region, investors have been reluctant to invest in houses, apartments and other permanent infrastructure. A when-will-it-bust mentality hangs over the region.
But participants in the San Antonio Clean Technology Forum’s Eagle Ford Forum II event Tuesday said the oil and gas development appears to be here to stay, and that it’s time for the region to figure out how to manage everything from water issues to roads.
Lance Robertson, vice president of Eagle Ford operations for Houston-based Marathon Oil Corp., said the South Texas fields are “almost without peer” in terms of productivity, and that operators will continue to work there even if oil prices drop.
“The Eagle Ford really stands apart from almost every other play,” Robertson said. “This is going to be the last bastion of activity if you see a low price environment.”
That’s why Robertson said the company and other operators in the region have been baffled by the reluctance of developers to build homes, or of banks to lend to developers. Robertson said Marathon employees in the region — and those of other operators — are making the kind of salaries that can easily support home-buying.
“They can afford to build homes, to buy homes, to renovate homes,” he said.
Marathon will invest one-third of its 2013 capital budget in the Eagle Ford, an estimated $1.9 billion, “And there are many operators,” Robertson said.
Henry Cisneros, chairman of the San Antonio Economic Development Foundation, said, “We’ve all been guilty of not being quite sure this is going to last.”
But Cisneros said there’s a rising middle class now in a region that used to compare with Appalachia or the Mississippi Delta in poverty.
“The region is fundamentally changed,” he said. “This is a world phenomenon that has occurred at our doorstep.”
Jim Marston, founding director of the Texas office of Environmental Defense Fund, said the industry and environmental groups need to stop talking past each other to address issues that range from water use to global warming.
He said many environmentalists are too dismissive of any benefits of hydraulic fracturing, the process of using sand, water and chemicals pumped at high pressure to break rock and release long-trapped hydrocarbons. And he said the industry does itself a disservice by saying that its operations don’t cause problems.
“Improve practices on the ground and that’s the way to win people over,” Marston said.
Robertson said he hopes there will be a broad focus on water across the state.
“We have to change our habits and do something different in our consumption of water,” he said.
Texas Comptroller Susan Combs said there is serious discussion at the Legislature of taking $4 billion from the state’s rainy day fund — which is funded by oil and gas severance taxes — and creating a $2 billion fund for water and a $2 billion fund for roads, which communities impacted by oil field activity would be able to tap for repairs.
Deteriorating and dangerous road conditions throughout the Eagle Ford region have been a huge topic of discussion, and the same problems are developing in the Permian Basin.
“We’re sitting on a lot of money,” Combs said.
County Judge Nelson Wolff said he hopes the Legislature will reinvest in South Texas. “We’re reaping great benefits and they need to be reinvested in South Texas,” he said.
The event was recorded by KLRN for broadcast.