The Dark Side of the Boom: Oil Is Doing Great Things for Some in Texas, but Not for Everyone

Categories: Cover Story

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.

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, Texas, 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.

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 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 hold.


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29 comments
Anse
Anse

And cue the sanctimonious haters...they're always predictable. One thing not mentioned in this article is just how tough it is for schools in these boomtowns. A friend of a friend teaches in a high school in the Valley and says their drop-out rate has gone way up. No reason to think about graduation or going on to something beyond high school when you can go drive a truck for $75,000/year. What's amazing is watching these communities go through their convulsions of momentous change as if they've never seen it before. It's gonna go on for years and years, huh? I bet they're doing zero to prepare for the inevitable bust. 

ksnyder35
ksnyder35

I initially had a measured amount of sympathy for "Sonia Melendez and her common-law husband" until it was reported that they both worked two jobs and could barely pay their bills and then they decided to have a child.


If you can barely make ends meet on your own, who in the hell would think they could live any better having a child?


It is examples like these that I have no sympathy for people like this.  I am willing to help somebody get up and make something better of themselves; however, I refuse to help anybody who won't try and help themselves.


As far as I'm concerned, they have earned their spot at the bottom.

toryu88
toryu88

Boo Hoo...I taught teachers when I was in college 34 years ago when I was studying to be a geologist.  It appears that they haven't gotten any smarter.  You pick up and move half way across the country without doing your homework first?  And this person is teaching kids?  I've worked in the industry for over 34 years, with one 8 year hiatus in the 90's when the industry tanked.  It has always been cyclical and anyone going into it for employment should know that or else they are not doing their own due diligence.  I am not sure what the point of the article is?  Most careers can have their ups and downs and if people thing there is a secure career path these days, they are fooling themselves.  I really cannot feel sorry for any of these folks.  Its the way life and careers are now days and if anyone tries to tell you differently, they are probably liberals selling socialist nanny state policies.  I told my son in law to get a job with a service company.  He went from loading trucks at a building supply company to supervising a fracking crew in about 10 years and is now making well over six figures a year.  The hours are long but the pay is better than he could ever hope to make with his education.  I told him just to keep his nose clean, stick with it, and the turnover rate and his innate intelligence would see him to the top.  I was right.  I am glad to see Midland turn around, in the 90's kids were killing themselves in record numbers in the Permian basin area because the lack of jobs and the grim future with the dying oil fields. While working there and closing down a Halliburton facility,  I met a convenience store clerk who's daughter had just killed herself, due to despondency. For every sob story they write about, there are probably 10 success stories due to the trickle down effect of the boom.

dcathey2
dcathey2

Good story. Reminds me of certain aspects of Houston's Oil Boom and Bust. Families came from Ohio and Michigan, among other places, and some were living out of their station wagons. They heard their was work here, but that wasn't always a simple truth. Houston was growing so fast that our freshman class at Spring Woods High School numbered over 1,000 students.

The oil business was an exciting and different arena to work in. In many situations, a handshake between players from two companies was as good as a notarized contract. Neither player would break his word. There was an enthusiasm about doing your job, whether you were working at the top with the executives or at the bottom in the mail room- because one of those executives just might have worked their way up there from that mail room. You never knew where you might end up. Gulf Oil was my first "real" working job, and while I thought I was just passing through before I returned to college, I loved it so much I stayed four years. The people I worked with were like family.

But the bust was a scary time. My husband at the time and I watched or heard about companies closing their doors from here to Midland. Friends lost their jobs every week. My husband lost his job at one time and luckily quickly found another. It was a time when you learned who your true friends were or when you could be a friend to someone in need. I also think it might be when that movie, "It's a Wonderful Life," really began to increase in popularity. I had never watched it or really heard about it before then, but when trouble comes, I think in addition to our faith, we also look for examples of how others have survived it.

Note: Teacher's salaries vary by region and years experience and enrollment.

dalton
dalton

Good stuff, I like the way you put a few faces on the boom/bust economics of Texas. Midland/Odessa is even more stark than the history of Houston, which kinda sorta diversified during the bust periods.

slynnmeador
slynnmeador

I thought this was an excellent article. My husband and I moved to Odessa during the first oil boom in 1980. We joked we were just passing through, but 30 years later we"re still here. The results of this boom are just as bad as this article describes. I would go farther and say its even worse. The average cost of a one bedroom apartment has been reported locally as $1200 monthly. The streets are overcrowded ,[lots of out-of-state license plates], the schools overflowing, and crime has increased tremendously.

Trash dumpsters are often overflowing due to a shortage of truck drivers; they"ve  all gotten higher paying jobs in the oilfield. Having said all that, there are a lot of good people here. Odessa is home.

Bubba
Bubba

Interesting that the reporter is from Victoria but she didn't write anything about the Eagle Ford there which has turned towns like Kenedy and Karnes City around.

FattyFatBastard
FattyFatBastard topcommenter

I had a hard time believing any of this, so I spent 3 minutes looking up apartments in Midland.  I was able to find over 20 places with rents under $1,000.  All within 10 miles of Midland also, so they'd be even cheaper further away.  Did you do any due diligence on the folks in this story to make sure they weren't embellishing their stories?  Anyone on a Teacher's salary (around $40k in Houston; I'll assume the same there) can afford $1,000 on a place to live.


This whole article doesn't pass the smell factor.

Tankghost432
Tankghost432

Umm...No....HELLO... I am Sonia Melendez.... And ill have you know my husband and I are very well educated .. With myself having several certifications.. Some including Phlebotomy Tech.. Propane specialist... Forklift operator... And Certified Mechanic Tech... So when my husband and I found out we were having a child we lived in a 3 bed 2 bath home... That was very comfortable... But due to the greed here... Much like yourself.. The landlord went up from paying $900/mth to paying $2550.00/ mth.... I was not going to pay that... SO BEFORE YOU JUDGE ME.... "SOMETHING THAT SHOULDNT BEEN DONE IN THE EYES OF THE LORD" ... walk a mile in my shoes... ILL HAVE YOU KNOW THAT THIS STORY DOESNT GIVE FULL DETAIL OF MYSELF AND SITUATION.... It also did not mention that I have 3 camaros..1 trans am gta rare ..1 chevy tahoe... And 1 R.V. ALL PAID FOR..IN CASH...I have never asked ANYONE FOR HELP.... Nor am I about to start.... I MAKE MY OWN BED AND I LAY IN IT.... AS ILL HAVE YOU KNOW ...MY..FAMILY..IS...WELL..TAKEN..CARE..OF... BY THE GRACE OF THE LORD....AND WE ARE VERY HAPPY N CONTENT...Thank you and have a blessed day MISTER...

Tankghost432
Tankghost432

Ummm .. EXCUSE YOU....Hello .. I am Sonia Melendez... And my husband and I are both very well educated . I graduated from high school , and I have several certificates including but not limited to .. Phlebotomy Tech... Propane specialist.. TABC certification... As well as mechanics ... When my husband and I decided to have a child we lived in a 3bed 2 bath home... Very spacious and comfortable... My husband worked 2 jobs and i worked 1 job and went to college to futher my education... SO BEFORE YOU JUDGE ME....."SOMETHING THAT YOU SHOULD NEVER DO, IN THE EYES OF THE LORD" walk a mile in my shoes.... AND AS FOR THE STORY...THAT WAS WRITTEN ... IT ALSO FAILED TO MENTION .. That my husband and I have 5 cars and 1 tahoe ALL PAID FOR... And also failed to mention.. WE BOUGHT AN R.V. PAID FOR IN CASH....so NO IM NOT AS HELPLESS AS YOU THINK ... NOR HAVE I E.V.E.R. TURNED TO A.N.Y.O.N.E . FOR HELP.... I MAKE MY OWN BED AND I LAY IN IT... MY FAMILY IS TAKEN CARE OF .... AND THATS ALL. THAT MATTERS...

custardpie
custardpie

@ksnyder35  Ok, tough guy, if you're "willing to help somebody get up and make something better of themselves", you might consider it a sign if they are working two jobs to make ends meet. Is that logical? Or are you averse to logic, aka Republican?

bixlermtn
bixlermtn

@toryu88 

Right. How could people pick up and move during a boom period? That's just crazy. I mean who would be influenced by the promise of easy jobs and money and a better way of life? Huh, who exactly?

dianna.wray
dianna.wray

@Bubba Thanks for reading! @agirlnamedelise is right. I'm from Houston but I did write for the Victoria Advocate and I covered the Eagle Ford play extensively, including a seven-part series. The final part of the series was focused on the impact on Karnes County.

agirlnamedelise
agirlnamedelise

@Bubba The reporter isn't from Victoria -- she's actually from Houston, hence why she's writing for the Houston Press. She lived and worked in Victoria for a few years.

LVandy
LVandy

@FattyFatBastard I live in a 2-bedroom apartment in Odessa. I'm paying $1530 a month and I'm one of the lucky ones. Because I have lived here for three years, my rent is actually a bit cheaper than those renting the same type unit right now.


It's true. If you want to live somewhere decent- where the plumbing works, the neighbors are safe and you aren't contending with roach or rat infested apartments- then you're going to be paying at least $1,100-$1,200 a month for a one-bedroom apartment. Your internet search isn't going to give a true indication of the quality of these apartments. Living here will.


My husband and I live paycheck to paycheck. We make it, but if we lived elsewhere making the same amount, we'd definitely be a little higher on the food chain, so to speak.


So stop with the "embellishing" accusations. You honestly have no idea.


-A lifetime resident of Odessa, TX

johnjwilks
johnjwilks

@FattyFatBastard Housing is expensive and tough to get- and those sub-$1000 apartments are in terrible shape. The "smell factor" you speak of is what the low-cost options reek of. I'm guessing you and your fatty-fat self wouldn't care to live in the cheap places you googled. If you want plumbing that works, lights that work, neighbors who aren't on parole or hiding from warrants, and no drug deals on your front steps, you WILL be paying $1200 and up for a one bed room. 


And saying they'd be cheaper further away- well, I'm not sure you get Midland-Odessa. We don't have suburbs. The small towns near by have little to no available housing and have no desire to become bedroom communities. San Angelo and Lubbock are nearly two hours away. This ain't Dallas or Houston. There are no endless miles of urban sprawl waiting to soak up the commuters. 


My wife and I both teach in Midland. It took us a long while to find a house that wasn't either in terrible shape or priced over our heads. Thankfully, I'm from here originally, so we stayed with family until we found the right place. It took 20 months.  


If we made any less than we do now, I'm not sure we'd have a place by now. 


Don't get me wrong. I'm not trying to complain. I like being home and we knew what we were getting into. I've seen booms before. 


But if you think its easy and this article is full of it, I dare you to pack up and move on out. 

bixlermtn
bixlermtn

@FattyFatBastard (the 'smell factor'? Used to be called the smell test. I guess you're smarter than the rest of us, using the word 'factor')

dalton
dalton

@FattyFatBastard 

Fatty, do you have a secret passion to become a realtor? Seems so.

Shouldn't you be warning us about soon-to-be hyper-inflation, and monetary debasement, how America is becoming Greece, and go short on long Tbills?

KHorn
KHorn

@FattyFatBastard I did the same thing and found one bedrooms for less than $900 in the heart of Odessa.  But hey, this is the Press so if any industry other than the media or entertainment is involved facts must not get in the way of the business is bad narrative.  My guess is Malugani got way over her head in student debt to get a degree with limited income potential and is now paying the price.

ksnyder35
ksnyder35

@Tankghost432 Hello Sonia.  I did not mean to insult nor demean you, however the truth usually does hurt, and that's unfortunate:  You sound as if you have really tried to better yourselves and that you live well and I commend you for that.


It sounds though, as if you may have been living beyond your means like so many irresponsible Americans not saving their money but, instead, spending it on "3 camaros, 1 trans am gta rare, 1 chevy tahoe, and an R.V all paid for in cash".  Where is your savings?


I'll have you know I only have one car, a 2-bedroom house, and I live comfortably on my income and I save my money just in case something bad happens.  I'm prepared.  You should be too.

ksnyder35
ksnyder35

@custardpie @ksnyder35 They were each working two jobs and barely getting by and then decided to have a child.  That's not only illogical, but irresponsible.

toryu88
toryu88

@bixlermtn @toryu88  I moved from Va in 1980 to Oklahoma but I damned sure checked out the town, and job before I moved there.  When I moved to Texas I did the same thing. Kind of like driving the morning commute from the house you intend to buy.  I wonder how many people do that, or don't only to find that they have an hour and a half sit in traffic.    I guess growing up in the military and moving six times in 12 years made me aware of the risks.  My point is, people do not thing for themselves any more.  The people in point suffered in large part because they did not do their own due diligence first.  "Caveat Emptor, let the buyer beware!" does not just mean at the mall.  Then of course they expect someone else to bail them out.  A fall out of Barryism.   I guess they slept through history class? All the booms in history, showed that the only people who found "gold" were the merchants and whores.  The same thing goes for the unconventional oil and gas boom.  The convenience store owners are making a killing along with hoteliers an moteliers.

dcathey2
dcathey2

Definitely sounds like the Texas spirit.

GTT = Gone to Texas. That's what people used to write on their doors before they headed down to this wild and uncivilized place-looking for something better or looking to run away from something.

Davy Crockett told Congress, 'You may go to Hell! I'm going to Texas."

FattyFatBastard
FattyFatBastard topcommenter

@LVandy Exactly how much do you think it costs to live in Houston?  And I don't see anyone here moving away.  

sfbayteam
sfbayteam

@KHorn @FattyFatBastard I can tell you from personal experience that Malugani did not get way over her head in student debt. She actually worked several jobs while she was in school and continues the same thing today-She got her loans after exhausting everything else, including what she could borrow from relatives. Anyone can read this article and assume that people in her situation just kept borrowing-not the case here. She is one of the best examples I have seen of someone who did everything she could to get her education and become a teacher-and did it for the children. 

Tankghost432
Tankghost432

When that story was.written.... It wasnt.because we werent saving.... It was because our landlord didnt want to fix the pipings in our home that we rented .. My husband, son, and I were all BREATHING IN BLACK MOLD... I made a choice to do an emergency move out... And I BROKE the lease agreement ..for our health benefit.... ITS NOT LIKE WE WERE HOMELESS for a year or half a year.... We lived like that for a Month & a 1/2... To save about 10,000 to buy a Nice RV... And as for your concern.. We do have.savings... But no matter the situation.... WE DONT TOUCH THAT MONEY...... WE WOULD RATHER STRUGGLE A LITTLE BIT MORE .. TO GET SOMETHING PAID FOR THEN TO R.E.N.T. FROM GREEDY PEOPLE.... ITS NOT LIKE I DONT HAVE GOOD CREDIT... my credit is excellent... I JUST DONT BELIEVE IN USING B.A.N.K.S. and would rather have something.paid for IN CASH... WE IN FACT are working to buy a.200,000 dollar home.. In cash... Located in Corpus Christi....LIKE I SAID ... KNOW MY BOOK .. BEFORE YOU JUDGE MY COVER...

ClaghornStag
ClaghornStag

@toryu88 @bixlermtn 

Yeah, everyone has the wherewithal to move out to a boomtown and just test drive it for a month or two...then come home and run a risk/benefit analysis on their laptops before deciding....perfectly reasonable!

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