Midland primedfor newboom
Oil workers who stayed after bust provide labor force
MIDLAND—LynSockwell, a 61-year-old oil field worker, spent 2016 peddling mac and cheese out of a shiny blue trailer on the street corners of this West Texas city.
Sockwell was laid off from an oil services company here two years ago, his third layoff over three decades in the industry. But with children and grandchildren in town, he had no intention of leaving Midland to chase another oil job.
“So we bought us a food trailer,” he said.
Midland food truck registrations are surging, up from 40 to 60 last year, and it’s one of the reasons why this city of 125,000, after a brutal oil bust, is
quickly capitalizing on the new drilling boom in the nearby Permian Basin, the heart of Texas oil country. In the past, when oil prices crashed, the city emptied out, houses got boarded up and workers sought jobs elsewhere.
This time, people stayed, found other ways to earn a living and now provide the skilled labor force that has allowed oil companies to ramp up quickly after spending billions to acquire land in the prolific and lucrative Permian.
“In spite of what everybody tells you, we’re not dying out here,” said city development director Chuck Harrington.
Today, Midland’s neighborhoods are full, traffic thick and shops open. School enrollment is up more than 1,000 students since the bottom fell out two years ago, and business and household connections to municipal water have risen by several hundred.
So why have people stayed? Locals attribute a good part of it to Midland grit, the tenacity that has kept the city going through the good times and bad, the booms and busts of the oil industry.
Economists loft other theories. Midland County is one-third larger than it was a decade ago, and with that size has come economic diversity — largely in health care and warehouse distribution — however slight. New technologies, others say, led many here to think that this downturn would be shorter as oil companies found less expensive ways to drill and put people back to work. And Midland residents may have simply gotten smarter and prepared better for the crash.
But the biggest factor might be the last boom, which climbed so high and lasted so long it drained workers from other sectors, creating such severe labor shortages that open positions were waiting when energy companies sent out layoff notices.
A skilled oil field hand can earn $90,000 a year, and other employers couldn’t compete. Local government, for example, pays workers in the streets department about $40,000.
“The county just couldn’t catch up, couldn’t stay up,” said Midland County’s chief executive, Judge Mike Bradford. “Couldn’t get people hired, because government doesn’t pay top money. Couldn’t get roads done.”
By 2014, so many cabbies had taken jobs in the patch, it was hard to find a taxi at the airport. Grocery stores couldn’t hire enough workers to keep shelves stocked. Restaurants had so few waiters, they often could open only half their dining rooms.
The city was especially hard hit. Managers tell stories of oil field headhunters luring away city workers — even as they filled potholes. In 2014, the city trained 24 police officers and lost 19 of them to the patch.
By that summer, when U.S. oil prices crested at $107 a barrel, the city had at least 200 unfilled positions out of 1,000. ‘Nothing happened’
Midland is an island of one-story ranch homes on the vast, flat Texas plain. It’s 60 miles from the southeast corner of New Mexico, 150 miles from Mexico and dry enough that grass planted in front yards gave up growing long ago. Its defining characteristic is best seen from hundreds of feet above: Oil drillers have cleared football-field-size rectangles of land with such regularity and in such numbers, they look like a grid overlaid on the landscape, stretching for hundreds of miles across.
Midland is also the re- gion’s financial center, home to a West Texas hub for nearly every major U.S. oil company. And it has weathered its share of busts. In the mid-1980s, a global surplus of oil drove crude prices from $31 a barrel in November 1985 to $10 a barrel in March 1986. By 1987, Midland County had lost 5,000 residents, about 5 percent of its population, then just over 100,000.
In the summer of 1997, stock market crashes and government upheaval in South Asia sent oil prices tumbling from about $25 a barrel to under $11 by the end of 1998. Seven thousand Midland employees, or more than one in 10, lost their jobs, and almost 3,000 moved out.
The busts left Midland families unable to make house payments, neighborhoods pock-marked with boarded-up homes, downtown businesses closed and city coffers millions of dollars lighter in sales and property taxes.
This one initially shaped up about the same. In the 18 months it took for oil prices to plunge from more than $100 a barrel to less than $30 early last year, Midland flipped from the fastest-growing workforce in Texas to the fastest falling. In 2015, Midland lost more than 7 percent of its jobs, which would have been the worst in Texas were it not for neighboring Odessa — a city of 110,000 just 20 miles down the road — which lost 9 percent.
Everyone assumed there would be another mass exodus out of Midland. “But nothing happened,” said Mayor Jerry Morales. Hiring binge
Three years ago, Big Country Catering was serving hamburgers, chicken-fried steak and meatloaf to the oil field, and, said owner Zac Patrick, “killing it.” But by the end of 2015, oil companies — 99 percent of Big Country’s business — stopped spending. Patrick, now 31, held on for a year via savings and small jobs. Then a friend helped him land an entry-level position as a financial adviser at the New York-based money manager Merrill Lynch.
Patrick, “born and raised in the patch,” never considered leaving Midland. “I’m not making near what I was in the boom, but it’s still a salary,” he said. “I’m able to pay bills.”
Ezequiel Marin got laid off in July by Chemplex, a Midland company that delivers hydraulic fracturing chemicals to the oil field. Marin, 59, was born in the Permian, grew up in Odessa, and, with his children and grandchildren still in town, he, too, never thought of moving. So he dug into his savings, bought some lawn mowers, tree trimmers and weed whackers, and started a lawn care company. The money — a little more than half of the $60,000 a year he was making in the oil field — was good enough to get him by.
But Marin also needed health insurance and a retirement plan, so he picked up a job six months ago driving dump trucks and front-end loaders with the city’s transportation department, for even less money. In 2013, just 20 of the city street department’s 60 jobs were filled. It’s now close to fully staffed.
Jared Hoskins came to Midland in the boom to work for Houston-based oil services company Baker Hughes. He got laid off more than a year ago, as Baker Hughes weathered the failed merger with its Houston rival Halliburton. But Hoskins, 33, wasn’t worried; he just kept looking for work.
In July, eight months later, Hoskins landed a job as a manager with the Houston oil field services firm Keane, and became an example of the rebound. He’s hired almost 40 people for Keane’s Midland office, which has grown from 20 to nearly 60.
“I’ve already tripled my employees,” he said. Grandma’s recipe
U.S. oil prices have doubled since the low last winter. They settled on Friday just under $54 a barrel.
And over the past several months, the Permian Basin has become the most coveted oil land in the country. It’s deep, rich layers of oil and gas have drawn bidding wars and historic prices over the past year. Nearly every large oil company has either bought in, or is trying — even as drillers eschew other U.S. oil fields.
Almost 300 rigs are drilling here now, more than double the number in May. The California oil major Chevron said late last year it was planning a Permian drilling program of such scale it called it a “well factory.” Noble Energy of Houston, said last month it was paying $2.7 billion to triple its holdings in one section of the Perm- ian. The next day, Irvingbased Exxon Mobil, the country’s largest oil company, announced it was buying 275,000 acres near here for $6.6 billion.
Early indications are that a large, available energy workforce helped Midland catch the wave.
At least half of the students in Leon Barton’s December truck driving class at Midland College were laid-off roughnecks, Barton said. Now oil field service company recruiters are calling the college looking to hire drivers straight out of school.
Oil field service companies like Schlumberger and Halliburton said they’ve had plenty of local job applicants as they’ve ramped up drilling in the Permian. Keane chief financial officer Greg Powell said competition for qualified employees is even beginning to get a little stiff.
And Sockwell, after selling brisket sandwiches, pulled pork and macaroni and cheese for almost two years, got a job offer from another oil field water disposal firm.
He’d love to stay in the food-truck business, he said. They made a little money. The mac and cheese — his wife’s grandmother’s recipe — topped with chopped brisket and barbecue sauce, was especially popular. “We sold a ton of it,” he said. But private health insurance was expensive, and about to run out.
So Sockwell is headed back to the patch. And that bright blue trailer? He’s put it up for sale for $35,000.
Pots and pans included.