Texas Railroad Commission

Horns Up: Commissioners' commitment.

In interviews with the Texas Tribune, candidates for the Texas Railroad Commission have taken the incredibly selfless step of committing to a full six-year term if elected to doing the job they’ve all signed up for. Precedent doesn’t bode well: The current chairman, Barry Smitherman, has only been in the job since 2011, having taken over from Michael Williams when he was appointed education commissioner by Gov. Rick Perry after four years on the commission. In any other job, keeping your word would be seen as a bare minimum, but in a position known primarily as a stepping stone to higher office, we suppose it’s progress. Good for state Rep. Stefani Carter, R-Dallas; Malachi Boyuls; and Ryan Sitton for agreeing to bring some stability of leadership to the office and give this editorial board a steady target for six years.

Horns Down: Sticking up for hate groups.

According to an email he sent to protest his daughter’s schools’ curriculum on civil rights last year, Texas Railroad Commission chairman and Attorney General candidate Barry Smitherman apparently believes that the Southern Poverty Law Center, a major civil rights non-profit organization, has a “radical” definition of racism, hate and intolerance. In the email, Smitherman protested the SPLC’s classification of Crusaders for Yahweh, Border Guardians, and the Jewish Defense League as “hate groups.” Crusaders for Yahweh is a self-described white supremacist organization founded by a neo-Nazi and devoted to “the advancement and survival of our Racial People’s the true children of Israel [sic].” The leader of Border Guardians has openly advocated for violent campaigns against undocumented immigrants. And the Jewish Defense League is classified as a “right-wing terrorist group” by the FBI, and has been linked to numerous acts of violence, including an assassination attempt on Republican Congressman Darrell Issa. We think the SPLC’s definition of “hate” is pretty reasonable. On another note, we’d like to thank the tea party group Voices Empower for posting the email on their Facebook page on Monday and showing us what kind of groups Smitherman endorses.

Photo Credit: Zachary Strain | Daily Texan Staff

MIDLAND — For many years, the landscape in West Texas was mostly uniform with dusty lots and artifacts of operating machinery left behind from a previous oil boom in the area. A generation removed from that boom, new oil rigs line roadways in the Permian Basin, where increased production will help the UT System bring in close to $1 billion in oil and gas revenue this year.

With a technologically driven oil-production boom, Midland’s landscape is transforming as the city works to build an infrastructure to support thousands of new residents while reaping the economic benefits associated with increased production. The UT System is also benefiting from the economic boom, and it doesn’t show signs of slowing down as dozens of companies have showed renewed interest in chasing the oil reserves on the 1.4 million acres the System has in the region.

Last October marked the first time land managed by the UT System produced more than 3 million barrels of oil since 1972 at the peak of the last oil production boom in the Permian Basin, said Jim Benson, executive director of University Lands.

University Lands, which has a Midland-based office, is responsible for managing the System’s 2.1 million acres that make up the Permanent University Fund.

The surge in production is part of a massive oil boom under the Wolfcamp Shale formation accessible through drilling technologies and techniques — horizontal drilling and hydraulic fracturing — that were not commonly used during the last boom in the area.

“This kind of changed everybody’s mind-sets to, ‘Now, we can go produce these source rocks or unconventional plays,’” Benson said. “That is what’s happening in the resurrection of the Permian Basin.”

With 50 oil and gas rigs actively drilling, 25-50 wells being assembled and 500 more permits waiting to be built on its land, Benson said University Lands still stands to increase its profits in the next two years as oil and gas companies leasing on the System’s land in the Permian Basin move into full manufacturing mode by 2015. 

“Even though there’s not a lot of manufacturing, there is a lot of capital expense, and our revenues are increasing in terms of the royalty rate,” Benson said. “Two years down the road, provided oil and gas prices stay as they are, we’ll make more than we did in the previous years.”

The Texas Railroad Commission defines the Permian Basin as an oil and gas producing area in West Texas 250 by 300 miles in area.

Benson said he expects University Lands to receive $850 million in royalties from production on leased land on top of the $112 million the System received in lease sale profits in the last fiscal year. 

In the last five years, the number of drilling permits approved by the Railroad Commission in the Permian Basin has almost doubled, increasing from 4,703 in 2007 to 9,3335 in 2012, according to Railroad Commission figures.

Oil and gas lease sales first skyrocketed during the September 2010 sale as the boom took off with total profits increasing during the following two sales, including a record high sale in September 2011 that brought in more than $310 million in profits.

The University of Texas Investment Management Company invests the sale profits and royalties and returns on investment make up the Available University Fund, which benefits the UT and Texas A&M systems. Last year, $205 million of UT-Austin’s $2.34 billion 2012-2013 operating budget came from the fund.

Profits from subsequent sales decreased substantially because fewer acres were available to be leased as companies jumped to lease in 2010 and 2011 when the boom picked up, Benson said. The most recent sale made only $70 million with about 16 percent of the acreage up for lease during the September 2011 sale. 

Oil was first discovered on UT lands in 1923, and the lands in the Permian Basin saw high levels of production during an oil boom in in the 1960s, during which the entire area produced 607 million barrels of oil over several years, according to the Texas State Historical Association.

Overall production in the basin totaled 312 million barrels of oil just last year, according to Railroad Commission figures. Production on University Lands, which fall mostly in the Permian Basin, reached 32 million barrels of oil in 2012 alone. 

Development and challenges

In a city where pump jacks are as common in backyards as swing sets, millions of gallons of water are being used per well for fracking. Despite a long-standing drought in the area, most locals’ concerns revolve around increased traffic and the faster-paced lifestyle that has resulted from the oil-driven migration to Midland. 

In 2005, the city’s population stood at about 99,000, according to city estimates. According to the U.S. Census estimates, the population stood at about 114,000 in 2011.

Some locals complain about the lack of supplies in grocery stores. A trip to the local Wal-Mart proves that multiple aisles have completely empty sections, including bottled water, raw chicken, sports drinks and toilet paper. Others complain about increased traffic in the area as travel time increases and major streets and roadways become a caravan of large oil transportation trucks and Super Duty Ford trucks emblazoned with oil and gas company logos.

Midland Mayor Wes Perry said the technology behind the current oil boom is essential to development in the area because it has boosted sales tax revenue, which the city is using for one-time capital projects after seeing increases in sales taxes.

“At this particular time, it’s not the typical situation like we had it in the past because it is driven by technology, not so much the price of oil,” Perry said. “When the price of oil drops, things will slow down, but it’s not going to be like it used to be where it was a boom and then a big bust cycle.”

Midland is currently undergoing various development projects to improve infrastructure, including highway widening projects and waterline extensions to industrial areas.

The increase of oil workers in the area has also transformed the city’s skyline with the construction of dozens of new hotels, which bring in hundreds of thousands of dollars in revenue for the city.

Perry said private sector developers are taking advantage of the financial opportunity in the housing market, which has faced increased levels in demand. Available and upcoming housing in Midland is projected at 5,300 available units, including 2,079 apartments and 1,301 hotel rooms, according to city housing documents.

City spokeswoman Sara Higgins said hotel units are also considered part of the available housing units because companies rent out multiple rooms and floors at some hotels during the week.

Not all have benefited from the oil boom in the area though. Local resident Marc McPeters moved to the area during the previous boom and has lived on the same plot of land for decades.

Back then, McPeters said she had to purchase her mobile home from New Mexico because housing was scarce.

Today, Endeavour Energy Resources operates an oil rig on almost half of McPeters’ property, but she said she doesn’t receive royalties from production revenue because Endeavour owns the mineral rights to her land. In Texas, land rights and mineral rights are sold separately. 

When Endeavour approached her about drilling on her property, McPeters said she wasn’t aware that her property ownership didn’t include mineral rights, which would entitle her to royalty payments on any oil production on her land.

“How they got them, I don’t know,” McPeter said. “They paid me $8,500 to put that pump jack there, and I had to pay taxes on that. They said ‘This is what we’re going to give you. Get out of the way.’”

Employment

The boom has also resulted in the lowest unemployment levels in the state as new drilling corporations have set up shop offering thousands of new jobs for locals and field workers who have moved into the area. In February, the unemployment rate dropped to 3.2 percent for the Midland metropolitan area — the lowest rate in the state and one of the lowest in the nation — according to a monthly report by the Texas Workforce Commission. The state unemployment rate, which has increased slightly this year, is 6.5 percent.

Adam Chavez, field coordinator for EagleOne, an independent transportation company that does oilfield transportation, said he moved to Midland from Plainview in 2011 because of the work opportunities in the area.

Chavez, who started as a company driver and was on call 24/7, travels home to visit his family during the weekend but lives in one of multiple RV campgrounds that have emerged throughout the Permian Basin. Some RV parks rent out space to oil workers who sleep in tents on makeshift grounds that locals call “man camps.” Man camps are not permitted on System land, according to a University Lands official. 

“I’ll be here as long as there is work and if the work doesn’t move north,” Chavez said. “I’ll be here until they say it’s dried up.”

Midland became the fastest-growing metropolitan area in the nation last year with a population increase of 4.6 percent, and Midland County was ranked as the 10th-fastest growing county, according to the U.S. Census Bureau.

High employment opportunities in the oil fields have left local restaurants that offer lower-paying jobs struggling to staff their operations while demand increases.

In the last two years, Gerardo’s Casita, a local Mexican restaurant, has lost cooks and kitchen staff to the oil fields, forcing Jerry Morales, Midland City Council member and owner of the restaurant, to step into the kitchen almost four times a week.

Morales said his restaurant has benefitted from the boom with tables occupied from open to close every day as the community thrives economically, but he has also had to make changes to adapt to the staffing challenges that come along with an increased amount of patrons.

It’s not unusual to see managers and owners working hosting and busboy duties in other restaurants, Morales said.

“It’s been very hard for us in the retail business to compete with an industry where they’re working 80 hours overtime in a week at 22 years old, bringing home a $3,000 check,” Morales said. “I’m probably paying $2-3 more [an hour] than I was 24 months ago.”

Gerardo’s Casita now closes for three hours between lunch and dinner and is closed all day on Sunday because Morales said he doesn’t have the staff to cover sufficient shifts to avoid paying current employees overtime. The restaurant has also increased menu prices to make up for the increased wages.

“It took a little while for us to understand [the boom] and it took a little to see if it was really going to last,” Morales said. “I don’t really call it a problem. It’s just a challenge.”

Photo Credit: Zachary Strain | Daily Texan Staff

MIDLAND — For many years, the landscape in West Texas was mostly uniform with dusty lots and artifacts of operating machinery left behind from a previous oil boom in the area. A generation removed from that boom, new oil rigs line roadways in the Permian Basin, where increased production will help the UT System bring in close to $1 billion in oil and gas revenue this year.

With a technologically driven oil-production boom, Midland’s landscape is transforming as the city works to build an infrastructure to support thousands of new residents while reaping the economic benefits associated with increased production. The UT System is also benefiting from the economic boom, and it doesn’t show signs of slowing down as dozens of companies have showed renewed interest in chasing the oil reserves on the 1.4 million acres the System has in the region.

Last October marked the first time land managed by the UT System produced more than 3 million barrels of oil since 1972 at the peak of the last oil production boom in the Permian Basin, said Jim Benson, executive director of University Lands.

University Lands, which has a Midland-based office, is responsible for managing the System’s 2.1 million acres that make up the Permanent University Fund.

The surge in production is part of a massive oil boom under the Wolfcamp Shale formation accessible through drilling technologies and techniques — horizontal drilling and hydraulic fracturing — that were not commonly used during the last boom in the area.

“This kind of changed everybody’s mind-sets to, ‘Now, we can go produce these source rocks or unconventional plays,’” Benson said. “That is what’s happening in the resurrection of the Permian Basin.”

With 50 oil and gas rigs actively drilling, 25-50 wells being assembled and 500 more permits waiting to be built on its land, Benson said University Lands still stands to increase its profits in the next two years as oil and gas companies leasing on the System’s land in the Permian Basin move into full manufacturing mode by 2015. 

“Even though there’s not a lot of manufacturing, there is a lot of capital expense, and our revenues are increasing in terms of the royalty rate,” Benson said. “Two years down the road, provided oil and gas prices stay as they are, we’ll make more than we did in the previous years.”

The Texas Railroad Commission defines the Permian Basin as an oil and gas producing area in West Texas 250 by 300 miles in area.

Benson said he expects University Lands to receive $850 million in royalties from production on leased land on top of the $112 million the System received in lease sale profits in the last fiscal year. 

In the last five years, the number of drilling permits approved by the Railroad Commission in the Permian Basin has almost doubled, increasing from 4,703 in 2007 to 9,3335 in 2012, according to Railroad Commission figures.

Oil and gas lease sales first skyrocketed during the September 2010 sale as the boom took off with total profits increasing during the following two sales, including a record high sale in September 2011 that brought in more than $310 million in profits.

The University of Texas Investment Management Company invests the sale profits and royalties and returns on investment make up the Available University Fund, which benefits the UT and Texas A&M systems. Last year, $205 million of UT-Austin’s $2.34 billion 2012-2013 operating budget came from the fund.

Profits from subsequent sales decreased substantially because fewer acres were available to be leased as companies jumped to lease in 2010 and 2011 when the boom picked up, Benson said. The most recent sale made only $70 million with about 16 percent of the acreage up for lease during the September 2011 sale. 

Oil was first discovered on UT lands in 1923, and the lands in the Permian Basin saw high levels of production during an oil boom in in the 1960s, during which the entire area produced 607 million barrels of oil over several years, according to the Texas State Historical Association.

Overall production in the basin totaled 312 million barrels of oil just last year, according to Railroad Commission figures. Production on University Lands, which fall mostly in the Permian Basin, reached 32 million barrels of oil in 2012 alone. 

Development and challenges

In a city where pump jacks are as common in backyards as swing sets, millions of gallons of water are being used per well for fracking. Despite a long-standing drought in the area, most locals’ concerns revolve around increased traffic and the faster-paced lifestyle that has resulted from the oil-driven migration to Midland. 

In 2005, the city’s population stood at about 99,000, according to city estimates. According to the U.S. Census estimates, the population stood at about 114,000 in 2011.

Some locals complain about the lack of supplies in grocery stores. A trip to the local Wal-Mart proves that multiple aisles have completely empty sections, including bottled water, raw chicken, sports drinks and toilet paper. Others complain about increased traffic in the area as travel time increases and major streets and roadways become a caravan of large oil transportation trucks and Super Duty Ford trucks emblazoned with oil and gas company logos.

Midland Mayor Wes Perry said the technology behind the current oil boom is essential to development in the area because it has boosted sales tax revenue, which the city is using for one-time capital projects after seeing increases in sales taxes.

“At this particular time, it’s not the typical situation like we had it in the past because it is driven by technology, not so much the price of oil,” Perry said. “When the price of oil drops, things will slow down, but it’s not going to be like it used to be where it was a boom and then a big bust cycle.”

Midland is currently undergoing various development projects to improve infrastructure, including highway widening projects and waterline extensions to industrial areas.

The increase of oil workers in the area has also transformed the city’s skyline with the construction of dozens of new hotels, which bring in hundreds of thousands of dollars in revenue for the city.

Perry said private sector developers are taking advantage of the financial opportunity in the housing market, which has faced increased levels in demand. Available and upcoming housing in Midland is projected at 5,300 available units, including 2,079 apartments and 1,301 hotel rooms, according to city housing documents.

City spokeswoman Sara Higgins said hotel units are also considered part of the available housing units because companies rent out multiple rooms and floors at some hotels during the week.

Not all have benefited from the oil boom in the area though. Local resident Marc McPeters moved to the area during the previous boom and has lived on the same plot of land for decades.

Back then, McPeters said she had to purchase her mobile home from New Mexico because housing was scarce.

Today, Endeavour Energy Resources operates an oil rig on almost half of McPeters’ property, but she said she doesn’t receive royalties from production revenue because Endeavour owns the mineral rights to her land. In Texas, land rights and mineral rights are sold separately. 

When Endeavour approached her about drilling on her property, McPeters said she wasn’t aware that her property ownership didn’t include mineral rights, which would entitle her to royalty payments on any oil production on her land.

“How they got them, I don’t know,” McPeter said. “They paid me $8,500 to put that pump jack there, and I had to pay taxes on that. They said ‘This is what we’re going to give you. Get out of the way.’”

Employment

The boom has also resulted in the lowest unemployment levels in the state as new drilling corporations have set up shop offering thousands of new jobs for locals and field workers who have moved into the area. In February, the unemployment rate dropped to 3.2 percent for the Midland metropolitan area — the lowest rate in the state and one of the lowest in the nation — according to a monthly report by the Texas Workforce Commission. The state unemployment rate, which has increased slightly this year, is 6.5 percent.

Adam Chavez, field coordinator for EagleOne, an independent transportation company that does oilfield transportation, said he moved to Midland from Plainview in 2011 because of the work opportunities in the area.

Chavez, who started as a company driver and was on call 24/7, travels home to visit his family during the weekend but lives in one of multiple RV campgrounds that have emerged throughout the Permian Basin. Some RV parks rent out space to oil workers who sleep in tents on makeshift grounds that locals call “man camps.” Man camps are not permitted on System land, according to a University Lands official. 

“I’ll be here as long as there is work and if the work doesn’t move north,” Chavez said. “I’ll be here until they say it’s dried up.”

Midland became the fastest-growing metropolitan area in the nation last year with a population increase of 4.6 percent, and Midland County was ranked as the 10th-fastest growing county, according to the U.S. Census Bureau.

High employment opportunities in the oil fields have left local restaurants that offer lower-paying jobs struggling to staff their operations while demand increases.

In the last two years, Gerardo’s Casita, a local Mexican restaurant, has lost cooks and kitchen staff to the oil fields, forcing Jerry Morales, Midland City Council member and owner of the restaurant, to step into the kitchen almost four times a week.

Morales said his restaurant has benefitted from the boom with tables occupied from open to close every day as the community thrives economically, but he has also had to make changes to adapt to the staffing challenges that come along with an increased amount of patrons.

It’s not unusual to see managers and owners working hosting and busboy duties in other restaurants, Morales said.

“It’s been very hard for us in the retail business to compete with an industry where they’re working 80 hours overtime in a week at 22 years old, bringing home a $3,000 check,” Morales said. “I’m probably paying $2-3 more [an hour] than I was 24 months ago.”

Gerardo’s Casita now closes for three hours between lunch and dinner and is closed all day on Sunday because Morales said he doesn’t have the staff to cover sufficient shifts to avoid paying current employees overtime. The restaurant has also increased menu prices to make up for the increased wages.

“It took a little while for us to understand [the boom] and it took a little to see if it was really going to last,” Morales said. “I don’t really call it a problem. It’s just a challenge.”

Marc McPeters, Midland resident with an oil rig on her property.

Photo Credit: Zachary Strain | Daily Texan Staff

For many years, the landscape in West Texas was mostly uniform with dusty lots and artifacts of operating machinery left behind from a previous oil boom in the area. A generation removed from that boom, new oil rigs line roadways in the Permian Basin, where increased production will help the UT System bring in close to $1 billion in oil and gas revenue this year.

With a technologically driven oil-production boom, Midland’s landscape is transforming as the city works to build an infrastructure to support thousands of new residents while reaping the economic benefits associated with increased production. The UT System is also benefiting from the economic boom, and it doesn’t show signs of slowing down as dozens of companies have showed renewed interest in chasing the oil reserves on the 1.4 million acres the System has in the region.

Last October marked the first time land managed by the UT System produced more than 3 million barrels of oil since 1972 at the peak of the last oil production boom in the Permian Basin, said Jim Benson, executive director of University Lands.

University Lands, which has a Midland-based office, is responsible for managing the System’s 2.1 million acres that make up the Permanent University Fund.

The surge in production is part of a massive oil boom under the Wolfcamp Shale formation accessible through drilling technologies and techniques — horizontal drilling and hydraulic fracturing — that were not commonly used during the last boom in the area.

“This kind of changed everybody’s mind-sets to, ‘Now, we can go produce these source rocks or unconventional plays,’” Benson said. “That is what’s happening in the resurrection of the Permian Basin.”

With 50 oil and gas rigs actively drilling, 25-50 wells being assembled and 500 more permits waiting to be built on its land, Benson said University Lands still stands to increase its profits in the next two years as oil and gas companies leasing on the System’s land in the Permian Basin move into full manufacturing mode by 2015. 

“Even though there’s not a lot of manufacturing, there is a lot of capital expense, and our revenues are increasing in terms of the royalty rate,” Benson said. “Two years down the road, provided oil and gas prices stay as they are, we’ll make more than we did in the previous years.”

The Texas Railroad Commission defines the Permian Basin as an oil and gas producing area in West Texas 250 by 300 miles in area.

Benson said he expects University Lands to receive $850 million in royalties from production on leased land on top of the $112 million the System received in lease sale profits in the last fiscal year. 

In the last five years, the number of drilling permits approved by the Railroad Commission in the Permian Basin has almost doubled, increasing from 4,703 in 2007 to 9,3335 in 2012, according to Railroad Commission figures.

Oil and gas lease sales first skyrocketed during the September 2010 sale as the boom took off with total profits increasing during the following two sales, including a record high sale in September 2011 that brought in more than $310 million in profits.

The University of Texas Investment Management Company invests the sale profits and royalties and returns on investment make up the Available University Fund, which benefits the UT and Texas A&M systems. Last year, $205 million of UT-Austin’s $2.34 billion 2012-2013 operating budget came from the fund.

Profits from subsequent sales decreased substantially because fewer acres were available to be leased as companies jumped to lease in  2010 and 2011 when the boom picked up, Benson said. The most recent sale made only $70 million with about 16 percent of the acreage up for lease during the September 2011 sale. 

Oil was first discovered on UT lands in 1923, and the lands in the Permian Basin saw high levels of production during an oil boom in in the 1960s, during which the entire area produced 607 million barrels of oil over several years, according to the Texas State Historical Association.

Overall production in the basin totaled 312 million barrels of oil just last year, according to Railroad Commission figures. Production on University Lands, which fall mostly in the Permian Basin, reached 32 million barrels of oil in 2012 alone. 

Development and challenges

In a city where pump jacks are as common in backyards as swing sets, millions of gallons of water are being used per well for fracking. Despite a long-standing drought in the area, most locals’ concerns revolve around increased traffic and the faster-paced lifestyle that has resulted from the oil-driven migration to Midland. 

In 2005, the city’s population stood at about 99,000, according to city estimates. According to the U.S. Census estimates, the population stood at about 114,000 in 2011.

Some locals complain about the lack of supplies in grocery stores. A trip to the local Wal-Mart proves that multiple aisles have completely empty sections, including bottled water, raw chicken, sports drinks and toilet paper. Others complain about increased traffic in the area as travel time increases and major streets and roadways become a caravan of large oil transportation trucks and Super Duty Ford trucks emblazoned with oil and gas company logos.

Midland Mayor Wes Perry said the technology behind the current oil boom is essential to development in the area because it has boosted sales tax revenue, which the city is using for one-time capital projects after seeing increases in sales taxes.

“At this particular time, it’s not the typical situation like we had it in the past because it is driven by technology, not so much the price of oil,” Perry said. “When the price of oil drops, things will slow down, but it’s not going to be like it used to be where it was a boom and then a big bust cycle.”

Midland is currently undergoing various development projects to improve infrastructure, including highway widening projects and waterline extensions to industrial areas.

The increase of oil workers in the area has also transformed the city’s skyline with the construction of dozens of new hotels, which bring in hundreds of thousands of dollars in revenue for the city.

Perry said private sector developers are taking advantage of the financial opportunity in the housing market, which has faced increased levels in demand. Available and upcoming housing in Midland is projected at 5,300 available units, including 2,079 apartments and 1,301 hotel rooms, according to city housing documents.

City spokeswoman Sara Higgins said hotel units are also considered part of the available housing units because companies rent out multiple rooms and floors at some hotels during the week.

Not all have benefited from the oil boom in the area though. Local resident Marc McPeters moved to the area during the previous boom and has lived on the same plot of land for decades.

Back then, McPeters said she had to purchase her mobile home from New Mexico because housing was scarce.

Today, Endeavour Energy Resources operates an oil rig on almost half of McPeters’ property, but she said she doesn’t receive royalties from production revenue because Endeavour owns the mineral rights to her land. In Texas, land rights and mineral rights are sold separately. 

When Endeavour approached her about drilling on her property, McPeters said she wasn’t aware that her property ownership didn’t include mineral rights, which would entitle her to royalty payments on any oil production on her land.

“How they got them, I don’t know,” McPeter said. “They paid me $8,500 to put that pump jack there, and I had to pay taxes on that. They said ‘This is what we’re going to give you. Get out of the way.’”

Employment

The boom has also resulted in the lowest unemployment levels in the state as new drilling corporations have set up shop offering thousands of new jobs for locals and field workers who have moved into the area. In February, the unemployment rate dropped to 3.2 percent for the Midland metropolitan area — the lowest rate in the state and one of the lowest in the nation — according to a monthly report by the Texas Workforce Commission. The state unemployment rate, which has increased slightly this year, is 6.5 percent.

Adam Chavez, field coordinator for EagleOne, an independent transportation company that does oilfield transportation, said he moved to Midland from Plainview in 2011 because of the work opportunities in the area.

Chavez, who started as a company driver and was on call 24/7, travels home to visit his family during the weekend but lives in one of multiple RV campgrounds that have emerged throughout the Permian Basin. Some RV parks rent out space to oil workers who sleep in tents on makeshift grounds that locals call “man camps.” Man camps are not permitted on System land, according to a University Lands official. 

“I’ll be here as long as there is work and if the work doesn’t move north,” Chavez said. “I’ll be here until they say it’s dried up.”

Midland became the fastest-growing metropolitan area in the nation last year with a population increase of 4.6 percent, and Midland County was ranked as the 10th-fastest growing county, according to the U.S. Census Bureau.

High employment opportunities in the oil fields have left local restaurants that offer lower-paying jobs struggling to staff their operations while demand increases.

In the last two years, Gerardo’s Casita, a local Mexican restaurant, has lost cooks and kitchen staff to the oil fields, forcing Jerry Morales, Midland City Council member and owner of the restaurant, to step into the kitchen almost four times a week.

Morales said his restaurant has benefitted from the boom with tables occupied from open to close every day as the community thrives economically, but he has also had to make changes to adapt to the staffing challenges that come along with an increased amount of patrons.

It’s not unusual to see managers and owners working hosting and busboy duties in other restaurants, Morales said.

“It’s been very hard for us in the retail business to compete with an industry where they’re working 80 hours overtime in a week at 22 years old, bringing home a $3,000 check,” Morales said. “I’m probably paying $2-3 more [an hour] than I was 24 months ago.”

Gerardo’s Casita now closes for three hours between lunch and dinner and is closed all day on Sunday because Morales said he doesn’t have the staff to cover sufficient shifts to avoid paying current employees overtime. The restaurant has also increased menu prices to make up for the increased wages.

“It took a little while for us to understand [the boom] and it took a little to see if it was really going to last,” Morales said. “I don’t really call it a problem. It’s just a challenge.”

Earlier this month the Sunset Commission, a Texas government institution that oversees state agencies and evaluates their effectiveness, released a report calling for several changes to be made to the Texas Railroad Commission, starting with its name.

Defying logic, the Texas Railroad Commission actually has nothing to do with railroads. Instead, it regulates the state’s extremely profitable oil and gas industry.  The commission consists of three statewide-elected commissioners, one of whom holds the position of chairman. If the Texas Legislature adopts the Sunset Commission’s suggestions, the name will be changed to the Texas Energy Resources Commission, or something similar. The Railroad Commission, the state’s oldest agency, hasn’t dealt with railroads or transportation in almost 30 years. One wonders why it has taken this long for the state to propose changing the name to something accurate.

The Sunset Commission’s report also contained several recommendations with more potential impact than mere semantics. The most contentious of these was the suggestion that campaign contributions for the Railroad Commission’s three members be strictly regulated, to avoid conflicts of interest with interested parties in the industry.

Because of large campaign contributions that aren’t confined to election seasons but happen throughout the commissioners’ six-year terms, the report says, it is “difficult to assure the public that the Commission’s regulatory decisions are made solely in the public’s interest, not simply in favor of large donors — especially when many key Commission decisions, rightly or not, favor the industry.”

In response, the report recommends limiting “the solicitation and receipt of campaign contributions by a Commissioner or any candidates seeking the office to a year and a half timeframe around the election, rather than throughout the full six-year term.” In addition, it suggests prohibiting “a Commissioner from knowingly accepting contributions from a party with a contested case before the Commission,” and requiring “the automatic resignation of a Commissioner that announces or becomes a candidate for another elected office.”

Despite the U.S. Supreme Court’s recent Citizens United v. FEC decision, the report says, “nothing has changed that would affect the continued appropriateness of these recommendations.”

The suggestions are a step in the right direction. The Texas Railroad Commission oversees the most oil and gas production of any state, with an estimated state economic impact of over $100 billion. Before 1973 and the years of OPEC dominance, the Texas Railroad Commission had almost total control of the world’s oil prices. Not only does the commission allocate production and price levels, but it also enforces industry compliance with federal environmental and safety regulations. While it doesn’t have the power it once did, it’s still a very big deal. Because of this, making sure the three commissioners aren’t being subsidized by the very industry leaders they’re supposed to regulate is absolutely imperative.

However, the Railroad Commission itself is not on board with the Sunset Commission’s proposal. In its official response to the report, the Railroad Commission “generally agrees with” the name change, but doesn’t show the same friendliness to the restrictions on campaign contributions. The response to all three of those proposals is the same: “The Commission should be held to the same standards as all other statewide-elected executive branch officials.” That isn’t to say the commission is united in their opposition, however. In the Railroad Commission’s most recent meeting, Chairman Barry Smitherman expressed amicability to the recommendations, saying that the restricted contribution period was still more than enough time to raise funds, but fellow Commissioner David Porter dissented.

The Railroad Commission’s official response doesn’t acknowledge the problem the Sunset Commission’s proposal aims to deal with, and it’s not a very substantial argument. While the three Railroad Commissioners are indeed statewide-elected executive branch officials, they have unique and enormous power over the economic, environmental and safety regulations of one of the world’s largest industries. They’re three of the most influential officials not just in Texas, but in the entire country, and they can’t be judged by the same standard as other state officials when it comes to campaign finance. With that in mind, it’s hard not to see the Railroad Commission’s response as the political equivalent of a spoiled child complaining that it’s “not fair,” without backing the complaint up with any real reasoning.

It’s difficult to put an actual number on the amount of money the three commissioners stand to lose if the Legislature passes the Sunset Commission’s recommendations, but it’d likely be a substantial sum. According to the Texas Ethics Commission, between 2010 and the present, Smitherman, Porter and incoming Commissioner Christi Craddick amassed over $200,000 in campaign contributions, with over half of that amount going to Porter. All three are relatively new to their positions, so it remains to be seen how much they’d be raking in outside of the Sunset Commission’s suggested window.

Fortunately, the Railroad Commissioners can’t do much to influence the decision on their own campaign finance rules. That’ll be up to the state Legislature, which will take the Sunset Commission’s proposals into account when it convenes in January. One can only hope our state government exercises common sense not only with regards to the Railroad Commission’s obviously necessary name change, but also to its campaign contributions.

In response to the Texas Sunset Commission’s recommendation that the Texas Railroad Commission change its name to more accurately reflect what it does, we have provided suggestions that better represent the spirit and purpose of the state government entity.

1. Not-in-Charge-of-Trains Commission
2. Black Gold Government since 1891
3. H.L. Hunt’s Fan Club
4. The Texas Drill Daddies
5. Fast Fracking Permit Providers
6. The Exxon & Chevron-Pays Boys Club
7. The What-Environmental-Consequences? Commission
8. The Only-Large-Donations-Accepted Agency
9. The Texas Secession Funding Commission
10. Rick and Anita Perry’s Christmas party A-Listers

HOUSTON — The Texas agency that oversees oil and gas drilling in the state has elected a new chairman who will oversee a thorough review ordered by the Legislature.

Barry Smitherman was elected Tuesday chairman of the Texas Railroad Commission. He replaces Elizabeth Ames Jones who recently resigned.

The Railroad Commission approves oil and gas drilling permits, and oversees other aspects of the state’s energy field. It does not oversee railroads.

Smitherman says he will ensure the agency uses scientific standards in decision-making, because “we must not let the political appointees in Washington kill our economic engine and kill our jobs.” Texas often opposes federal regulation over drilling and environmental issues.

He will also oversee the thorough review of the agency’s operations, rules and regulations by the Sunset Advisory Commission.

Election 2010

The election of the next chairman of the Texas Railroad Commission, the office charged with regulating the state oil and gas industry, will test whether more endorsements and experience can help one candidate overcome an even bigger handicap — the ‘D’ next to his name.

The race between Democrat Jeff Weems, a lawyer from Houston, and Republican David Porter, an accountant from Giddings, takes on added significance as the commission approaches review in the next legislative session by the Sunset Advisory Commission, which can make recommendations to overhaul or abolish ineffective state agency bodies. Hearings on the railroad commission end in November.

Since 1994, Republicans have been charge of regulating the Texas oil and gas industry, but after incumbent Victor Carrillo was upset in the Republican primary by the little-known Porter, Democrats began to view the seat as a statewide office that could potentially change hands. A UT/Texas Tribune poll released Monday shows Porter leading Weems 50 percent to 34 percent. In the poll, undecided voters were pressed to choose a candidate.

Low natural gas prices in the current economy could mean a slow down in drilling activity, said Justin Furnace, president of the Texas Independent Producers and Royalty Owners Association.
“Leadership is needed during the slowdown to fix issues at the railroad commission and find ways to encourage operators to invest in Texas,” Furnace said.

The UT System owns 2 million acres of oil and gas-rich land, about half of which are leased to companies for oil and gas exploration. Oil and gas prices affect the value of those lands to UT. Jim Benson, director of University Lands, said the UT System is in tune with the daily operations of the commission, which oversees drilling, pipeline leaks and other environmental issues.

“We work in concert with the railroad commission. We also have people looking after UT System institutions’ interest in the Permanent University Fund lands,” Benson said. “The railroad commission is a tremendous tool that we utilize.”

Small-percentage payouts from the Permanent University Fund pay for certain academic programs and other critical items at UT Austin and 16 other institutions in the UT and Texas A&M systems. According to the UT System’s quarterly prediction, recovering oil prices will greatly increase UT’s payout.

Weems, who received six major newspaper endorsements, said commissioners should fight for continued support of the agency so that it has the manpower to enforce environmental regulations. He said Republican commissioners brag about cutting their budget to the point that the body can’t do its job, which led to lax regulation and increasingly ignored safety issues in locations such as the Barnett Shale in North Texas.

“The field people could fix [environmental issues in the Barnett Shale] quickly, but instead the EPA and the TCEQ will come in, stumble around and do things that don’t fix the problem and screw up the job-creating aspect of the industry,” Weems said.

Weems has received $38,000 from lawyers and lobbyists. Porter has received $12,500 from the energy and natural resources sector. Carillo had received $168,000 from the energy and natural resources sector.

Porter said in the state’s present budget crisis, the commission will have to do more with less to maintain the regulatory functions of the commission and keep families near drilling activities safe. Porter said he looks at regulations from the point of view of people who have to comply with them.

“If they can’t comply with them, it doesn’t matter what it’s supposed to achieve,” he said. “Compliance is what’s going to achieve the safety goals that [the regulation] has got in mind.”

But Andrew Wheat, research director for Texans for Public Justice, said the railroad commission is a textbook example of a “captured agency,” a state agency beholden to the interests of the industry it is supposed to regulate. Current railroad commissioners have received 40 to 45 percent of their campaign donations from the oil industry, which he said is a “huge conflict” of interest. Donations from lawyers and lobbyists with interests in matters that the commission regulates is also a potential conflict of interest, Wheat said.