“Texas is the place to be for job growth and economic development,” said Texas Workforce Commission Chair Ruth R. Hughs in a Jan. 18 press release detailing the state’s most recent unemployment numbers. Year over year, employers in Texas added 391,800 jobs, Hughs said, and December marked the third consecutive month of record low unemployment levels at 3.7%. “With mining and logging jobs, which includes oil and gas employment, up 18% from the prior year, our employers and our workers are providing the energy that fuels the US economy,” Hughs said. Annually, mining and logging led all other major industries in Texas since May 2017.
Unsurprising to OGJ readers and most Texans, many of those jobs are being filled in and around the Permian basin. The Midland Metropolitan Statistical Area (MSA) recorded December’s lowest unemployment rate among Texas MSAs with a non-seasonally adjusted rate of 2.1%, followed by the Amarillo MSA and Odessa MSA, which tied for the second lowest with a rate of 2.6%. The Midland MSA recorded December’s lowest unemployment rate among Texas MSA’s this time last year as well.
As reported in the US Energy Information Administration’s most recent Short-Term Energy Outlook, the Permian region is forecast to produce 4.8 million b/d of crude oil by yearend 2020, which is about 1 million b/d more than estimated December 2018 levels and would represent about 36% of total US crude oil production at yearend 2020. While the forecast annual growth rate in 2019 is 600,000 b/d—400,000 b/d slower than in 2018 due to pipeline capacity constraints—the expectation is that the issue alleviates in this year’s second half with additional capacity coming on stream. What follows? An EIA forecast that Permian growth accelerates monthly into 2020.
And with that, continued growing pains. In recognition, energy companies partnered late last year to create the Permian Strategic Partnership (PSP) and pledged $100 million to ease the strain felt in education, healthcare, infrastructure, housing, and workforce development. PSP members have committed to work in partnership with local elected officials and community organizations.
On Jan. 17, former US Commerce Sec. and Permian basin resident Don Evans was named PSP chairman. His prior involvement helped facilitate meetings with the Texas Department of Transportation (TxDOT) and the US Department of Transportation (USDOT) to discuss Permian road conditions—a critical issue in the area.
Water, sand, equipment, and trucks are damaging roads and compromising safety. While just 2% of Texans live in the Permian basin, 10% of all traffic fatalities take place there, a Dec. 6 TxDOT press release reported. Since 2010, the Permian basin has seen a 46.3% increase in fatalities, the release continued, setting the stage for news that the USDOT awarded the area $50 million in grants for road improvements.
TxDOT’s 10-year Unified Transportation Program includes plans for more than 1,700 miles of improvements to strengthen pavements, add shoulders, and add lanes for passing and travel. USDOT grants will be used to replace the existing four-way stop with an overpass at SH 302 and SH 115 in Kermit, Tex., and replace the existing four-way stop with an overpass at SH 158 and SH 137 and improve SH 137 west of Garden City, Tex.
“The Permian basin energy sector employs 444,000 people, fuels 10% of our state’s economy, and produces 30% of our nation’s oil and gas. With production in the Permian projected to double in the next 5 years, it is imperative that West Texans have access to safe, reliable highways to accommodate increasing traffic,” said US Representative Will Hurd (TX-23), who penned a bipartisan letter of support signed by 21 members of Congress to US Department of Transportation Sec. Elaine Chao and by advocating for the projects to Deputy Asst.-Sec. Sean McMaster.
Local governments, school districts, business organizations, nonprofits, and foundations are working to address critical issues in a time of exponential growth in the Permian basin. PSP brings additional attention and support. And, while currently comprised of upstream operators and service companies, Evans expects midstream companies to join PSP, and then, perhaps, companies outside the energy business to the benefit of all that live and work in the area.