the football game. It was a town where everyone knew everyone. People left their doors open and keys in the ignition. Life was simple and quiet, but still the town suffered economic woes. That all changed with the discovery of Eagle Ford Shale. The hydrocarbonproducing formation produces gas and more oil than other traditional shale plays thanks to a new extraction technique called hydraulic fracturing (see page 48). In 2008, Petrohawk Energy Corporation drilled the first well in Hawkville Field in La Salle County. The discovery was significant for the formation, which runs roughly 50 miles wide by 400 miles long. Eagle Ford Shale runs from the Mexican border up to some parts of East Texas. In its first year, there were about 30 wells, according to the state’s Railroad Commission, which regulates the exploration and production of oil and natural gas. Now the commission reports about 4,400 permits for drilling natural gas and oil. Experts estimate there will be 25,104 new oil and gas wells built from 2012 to 2021. Cotulla, county seat of La Salle, has been called the epicenter of Eagle Ford Shale activity, and like its neighboring cities, is now considered a boomtown.
A COUPLE OF YEARS AGO, COTULLA, TEXAS WAS JUST A DUSTY, LITTLE TOWN off Interstate 35...
BOOMTOWN A SMALL TOWN FOREVER CHANGED
The impact of Eagle Ford Shale in South Texas
about halfway between San Antonio and Laredo, known for whitetail deer and wild hog hunting and the La Salle County Wild Hog Cook-Off & Fair. With a population of barely over 3,600 people, it still had many dirt roads and very few traffic lights. Residents hardly worried about being stuck in traffic, unless it was Friday night when the entire town made its way to the high school for
Story and Photos BY LAURA GARCIA
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It was in that dusty, little town that my mother and father were raised. The high school sweethearts moved the family to San Antonio when I was 12 years old. Over the next decade I returned to town only to attend funerals. Cotulla was also the place my grandparents made a name and for themselves. Both businessmen, my father’s father was a city leader and my mother’s father was a mechanic. They are gone now and all that remains are names on plaques outside of old buildings and stories from people who knew them. On a recent visit, I drove by the cemetery where my loved ones rest. What was once nothing but red dirt and brush near headstones is now dozens of RVs, trailers and small cabins. It’s the same story all over town. My grandmother’s old home had been converted into small apartments. My grandfather’s grocery store, the Red Store No. 3, has been painted highlighter green. A wall mural painted on the side of Bill’s Dollar Store facing Main Street is no longer there. My dad’s name along with the names of all of the local servicemen who fought in the war belonged on that wall. It’s since been painted over; Bill’s also sits empty. November 2012
BOOMTOWN BY THE
Boomtown By the Numbers Source: The University of Texas at San Antonio Institute for Economic Development’s Center for Community and Business Research.
Total economic output impact $25 billion Eagle Ford Shaleimpact in 2011of Eagle Total of economic output Ford Shale in 2011
$62 billion Projected total economic Projected total economic output output impact of Eagle Ford impact of Eagle Ford Shale in 2021 Shale in 2021 (moderate scenario)
47,097 47,097 Full-time jobs related to Eagle Full-time jobs related to Eagle Ford Shale in 2011 ShaleFord in 2011 82,645 82,645 Projected full-time jobs related Eagle Projected full-time jobs in to 2021 Ford Shale in 2021 (moderate scenario)
$25,000 to $80,000 25,104 Salarynumber range for Ford Projected of Eagle new oil and Shale entry-level jobs gas wells built from 2012 to 2021 (moderate scenario) 25,104
I remember growing up and going to Winn’s, a five-and-dime store, with my mother and little sister. That’s long gone. The streets are much worse than I remembered, packed with 18-wheelers and oil rig trucks and laborers in white trucks. The population has skyrocketed, more than doubled they say, and people in town worry about the city being crowded with an excessive amount of single men. The town has seen an influx of cantinas, which aren’t to be confused with neighborhood bars. Amid all of this change, there are still remnants of hope for my old hometown.
SAME OLD, SOME NEW
Walking into Ben’s Western Wear brings a flood of memories. The store smells of leather and it’s vaguely familiar, though it’s been at least 15 years since I’d last been there. It’s one of the places people say has retained that Cotulla character. Storeowner Jill Martin said business has been good since Eagle Ford Shale. “We’re very thankful,” she said. Behind her there are more than 400 cowboy hats
hanging on nearly every inch of wall and even more in storage. George Strait, who owns a ranch near Cotulla, and Gov. Rick Perry hung their old hats here sometime in the last 25 years or so. So did Paul Cotulla, son of Polish immigrant Joseph Cotulla, who established the town in 1881. Many hats are from regular folks in town. Outside of the store, two oil rig workers talk about how Cotulla has treated them in the last two years since they arrived. They are originally from McAllen and live in an RV park in town. Their work schedule: 12hour workdays, sometimes working seven days straight. They are lucky, they said, if they get a chance to go home to their wives and children on weekends. It’s just part of the job. One thing they said they look forward to is more food options. They said they heard a rumor Whataburger was coming to Cotulla. A newly-opened chain restaurant sells one taco for almost $5. The grocery store sells a frozen pizza for nearly $10. That same pizza sells for less than $4 in San Antonio. Prices are inflated, and though laborers
might be able to afford it, many residents are worried about the town’s low-income, elderly population. Leodoro Martinez, Executive Director for the Middle Rio Grande Development Council and Chairman of the Eagle Ford Shale Consortium, said that residents should be prepared to ensure there won’t be a “bust” that will leave the community devastated. Martinez said towns affected by the energy boom need to take advantage of the opportunities that are before them and use it to invest toward the future. “That’s what sustainability is all about it,” he said. “Of course that’s easier said than done.” Martinez, who was a former councilman, Cotulla mayor and county judge, said the Eagle Ford Shale Consortium began a couple of years ago as a meeting in response to workforce changes. Now there are hundreds involved. Committees were formed and whether they are private citizens, public officials, education entities or businesses, all are concerned with the future of the counties affected by Eagle Ford Shale. “Nobody was really expecting it,” Martinez said.“It caught everybody by surprise.” Nora N. Rodriguez, executive director of the city’s Housing Authority, said that for the last three years, finding affordable housing for the low-income population has become increasingly difficult. The city’s 47 Section 8 housing vouchers are filled. So is public housing, yet another 40 families are on a waiting list. She said even more could be waiting but don’t bother to apply for housing assistance because they know there are so many on the list ahead of them. Rodriguez explains that landlords can potentially lease a property to eight laborers, charging by the week, and bring in much more money than they would if it was leased to a single family. City administrator Larry Dovalina agrees that the current state of housing has some hardworking families being ousted from rental properties. “There have been people who have been displaced because of the opportunity it presents to owners,” Dovalina said. He said Cotulla, like many rural communities throughout the U.S., was dying on the grape vine with high unemployment and little economic activity. The city was composed of older residents that had lived here all their lives and young families whose children leave town for better opportunities and never come back. “This activity has changed all of that in many ways,” he said.
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$890 million Projected number of new oil Projected revenue for local government and gas wells built from 2012 from Eagle Ford Shale in 2021 to 2021 $1.6 billion $890 MILLION Projected revenue for state government local from Projected Eagle Fordrevenue Shale infor 2021 government from Eagle Ford Shale in 2021
Projected revenue for state government from Eagle Ford Shale in 2021 Source: The University of Texas at San Antonio Institute for Economic Development’s Center for Community and Business Research
City Administrator Larry Dovalina
RV park in Cotulla
Ben’s Western Wear
Retired from his post as city manager of Laredo, Dovalina started managing the city in June 2008 thinking it would be easy. He has about 35 years of public service under his belt. In 2009, the first indication a change was coming was when they started to see landmen show up at the temporary county courthouse. They gathered at tables looking at all these deeds and titles day in and day out. Then slowly a transition occurred of title transfers, contracts being signed and exploration. Mineral rights owners saw benefits from the oil and gas companies within 18 months to two years. “There were some families who held onto their lands who never in their wildest dreams would have thought that they had minerals underneath their property and had struggled for all these years,” he said. Soon thereafter new sources of revenue started streaming into the city. He said it became clear that Cotulla would need experienced personnel to handle the rapid changes during the growth spurt to ensure that whatever is being built would be sustainable for the future. “The money you’re gonna get is a oneshot deal, and you better do it right or end up on the wrong end of a project,” Dovalina said. Eventually the city hired planners, engineers and other human resource personnel from Laredo or San Antonio. Job positions at Cotulla Independent School District, however, go unfilled. Inside the school district’s central office, the sounds of huge tanker trucks barreling through downtown are muted. Superintendent Jack Seales sits in his office and draws a picture of a bucket. He’s illustrating how the state’s formula determines how much a school district should spend based on attendance. The state recaptures any overflow and gives
An oil rig in Cotulla Photo by Reuben Davila
Cotulla Mayor Javier Garcia
Leodoro Martinez, Chairman of the Eagle Ford Shale Consortium
the funds to poorer districts to balance disparities. Seales explains that Cotulla I.S.D. will have to send as much as $15 million back to the state next year because of an increase in property taxes. Property values in Cotulla rapidly increased from $534 million in 2010 to $2.3 billion this year. Chapter 41 of the Texas Education Code makes provisions for certain school districts to share their local tax revenue with other school districts. The Texas Education Agency added a third of the districts affected by the Eagle Ford Shale energy boom to its annual list of property-wealthy districts, known as Chapter 41 schools. Alamo Heights is among the list of districts required to “share the wealth.” But a key difference is that most of the students’ families in Cotulla are not wealthy. Cotulla and other districts affected by Eagle Ford Shale filed a law suit against the state over its funding. Cynthia Perkins, principal of Ramirez Burks Elementary, said about 85 percent of students at the elementary enroll in the free or reduced lunch program. Those children are living at or below the poverty line. Perkins took a group of students to Washington D.C. where they met U.S. Rep. Henry Cuellar. She said that he told the students, “Cotulla will never be the same.” Perkins agrees.“It’s transformed this whole community,” she said. According to Seales, last year the custodial staff was at half-staff. The district could not attract anyone to fill these nonprofessional staff positions because of the lure to work for new hotels and restaurants in town. In an effort to compete for workers, Seales said the office gave nonprofessional staff a 5 percent raise based on the Counties affected by Eagle Ford Shale formation
Truck in downtown Cotulla Graphic by Reuben Davila
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midpoint salary range. The district also implemented an economic equity stipend which pays workers $1 per hour as a bonus check each month. Seales says the district has hired teachers, but many are forced to resign before they even begin because they can’t find affordable housing near Cotulla. “It’s just a difficult situation,” he said. He said some teachers are commuting from Devine and San Antonio. Another cause for stress, he added, is that there will be drilling of new oil rigs and a lot of tankers and truck traffic near the high school. He said this is also where the newest, most inexperienced students drivers will be. Seales said he’d rather students be tardy than rush to class and get in a potentially dangerous situation. That’s also the number one complaint heard throughout Cotulla: the streets. Tanker trucks and 18-wheelers are damaging the city’s streets. The oilfield traffic is taking a toll on roads that were not designed to handle so much weight. This is according to a study by the University of Texas at San Antonio. Mayor Javier Garcia said fixing the streets is one of his top priorities. Dovalina said there might be substandard water and sewer pipes underneath many of the streets and those pipes will need repair before paving. Dovalina said he wants to ensure streets are made the right way and will last at least 20-30 years. That’s not the only change coming to town. By early 2013, Cotulla could have five law enforcement officers policing the streets. The city cannot afford to start up its own city police department. Garcia explained that because of a new interlocal agreement, a City of Cotulla division will be created within the La Salle County Sheriff’s Department. According to Garcia, the city is also changing the truck route so that it doesn’t run through residential neighborhoods and school zones. “They’ll be enforcing codes. Enforcing it so these trucks can stay out of the neighborhoods,” he said. There are signs posted which prohibit trucks from driving through, for instance, the street between the middle and elementary schools. I watched one afternoon as an oil tanker ignored the sign and sped through the two campuses. Dovalina added that with an increased law enforcement presence, “Either they obey the traffic laws, or we’re gonna make a lot of money.” Cotulla, in a lot of ways, is a different little town. One thing is for sure: its residents are cashing in with Eagle Ford Shale. Like S.A. Scene at www.facebook.com/SAScene
Weaning Off Oil
Boomtown By the Numbers Source: The University of Texas at San Antonio Institute for Economic Development’s Center for Community and ELECTRIC VIA BUSES Business Research. Just as cars are getting smarter and more fuel efficient, VIA Metropolitan Transit has invested in the in clean power technology. $25latest billion Public transportation can be sustainable and emissions-free, andof Eagle Total economic output impact VIA is wasting no time. Ford Shale in 2011 VIA purchased three 35-foot EcoRide transit vehicles from contractor Proterra that run on batteries. electric fleet is charged $62The billion for 10 minutes at a charging station atProjected VIA’s Robert Thompson total economicTransit output impact Station at the Alamodome. The electricity is generated byineither of Eagle Ford Shale 2021solar (moderate panels or by CPS Energy’s Windtricity scenario) program. The buses offer a quieter riding experience, with the capacity for 64 riders, that tops out at 55 mph. 47,097 Patrons in the central business district andjobs downtown should Full-time related to Eaglestart Ford Shale to see a new bus fleet called the ARC. in A contest this summer determined 2011 the appearance of the new all-electric buses. A handful of other cities nationwide including Austin are adopting 82,645 the new EcoRide vehicles. Projected full-time jobs related to Eagle BY LAURA GARCIA
Ford Shale in 2021 (moderate scenario)
COMPRESSED NATURAL GAS GAINS POPULARITY
CNG (compressed natural gas) is 25,104 composed of methane and is made by compressing natural gas to less than 1number percent of new its volume. Projected oil and gas CNG has been used worldwide as a transportation fuÅel since the 1940s, wells built from 2012 to 2021 (moderate according to a study by the Universityscenario) of Texas at San Antonio Institute for Economic Development’s Center for Community and Business Research. Of the 12 million CNG-powered $890vehicles million worldwide, only 112,000 are in operation in the UnitedProjected States. revenue for local government Using CNG costs less than traditional and hasShale reduced fromfuel Eagle Ford in 2021 emissions, but most fleets can only operate in a limited area before returning to an in-house facility to gas$1.6 up again. billionA lack of refueling options means that CNG-powered vehicles are not an option for government Projected revenue for state many companies. Some states, like Oklahoma, offer taxShale credits for CNG from Eagle Ford in 2021 conversion, purchase of CNG vehicles or installation of home refueling units. Our neighboring state has 60 public fueling stations compared to Texas’s 26. In March 2012, GE and Chesapeake Energy Corporation announced a new collaboration seeking to develop technology that would allow the use of natural gas in the transportation sector as a source of fuel. Advances in this arena will allow for the wider use of liquefied natural gas and compressed natural gas in transportation and result in reduced emissions and lower costs to fleet operators and other consumers.
REPLACING COAL AT ELECTRIC POWER PLANTS The use of coal is responsible for 42 percent of electricity generation in the country, compared to 25 percent for natural gas, according to a study by the University of Texas at San Antonio Institute for Economic Development’s Center for Community and Business Research. Since gasfired plants can readily meet President Barack Obama’s administration’s proposed carbon-emissions standard, there’s an expectation to see a continued increase in the use of gas instead of coal for the production of electricity. CPS Energy in San Antonio agreed to purchase an 800-megawatt gas plant that will replace the energy output of a two-unit coal plant going offline in 2018. According to a recent company press release, this was a less expensive option for CPS than the alternative of spending $565 million to install carbon scrubbers at the existing coal-fired plant that would have been required to meet EPA standards.
A Small Town Forever Changed: The impact of Eagle Ford Shale in South Texas Story and Photos By Laura Garcia Published November 2012 in S.A...