Boom Meets Bust in Texas: Atop Sea of Oil, Poverty Digs In

By MANNY FERNANDEZ and CLIFFORD KRAUSS JUNE 29, 2014

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Getting By in Boom Times

A cowboy turned roughneck reflects on the haves and have-nots in Texas’ Eagle Ford oil boom.
CreditBrent McDonald/The New York Times

GARDENDALE, Tex. — From the window of her tin-roofed trailer, Judy Vargas can glimpse a miraculous world. It is as close as the dust kicked up by the trucks barreling by but seems as distant as Mars.

As you walk out of her front yard — where the chewed-off leg of an animal, probably a feral hog caught by a prowling bobcat, rots outside — a towering natural gas flare peeks over the southerly view. Across the railroad tracks and Interstate 35, a newly reopened railroad interchange stores acres of pipe and receives shipments of sand from Wisconsin to be used in hydraulic fracturing, or fracking. Next to the terminal is an expanding natural gas processing plant that lies in the heart of the Eagle Ford, a giant shale oil field that here in La Salle County alone produces more than $15 million worth of oil a day, or about one out of every 55 barrels produced in the United States.

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This rural patch of thick mesquite in the brush country south of San Antonio had been known for something else. Five miles from here in Cotulla, Lyndon B. Johnson at the age of 20 saw hardship so searing that it would help inspire his war on poverty.

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Poverty Endures in a Texas Colonia

CreditNicole Bengiveno/The New York Times

Now, it is the scene of one of the greatest oil booms the country has ever seen. But poverty endures in makeshift, barely governed communities called colonias, such as the one where Ms. Vargas shares her trailer with an ever-shifting assemblage of relatives.

Caught in Poverty

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Decades after Johnson took a teaching job here in 1928, the area, like the country, is a startling and incongruous mix of cascading wealth and crushing hardship. And though the boom has helped produce fortunes for some and comfortable lives for many, for others it exists within a rural landscape of unpaved streets without garbage pickup, where few dare to drink the tap water because it tastes and smells like chlorine.

Early one evening in May, Ms. Vargas, 28, cooked spaghetti for her three children and her grandmother. Ms. Vargas, a high school dropout, had just arrived home from her job as a restaurant cook. She and her grandmother, who works as a maid at a motel, make a total of roughly $1,500 a month, far below the federal poverty level of $2,325 for a family of five. Above their dining table, there was a portrait of the Last Supper and, tucked in a corner of the frame, a picture of Ms. Vargas’s uncle, unsmiling in a white uniform and one of at least three incarcerated relatives. The family ate and swatted at flies as trucks roared by.

It is a different kind of poverty than it was in 1928, this time surrounded by a buzz of industrial activity, not empty stretches of scrub grass. But it feels as entrenched as ever, reinforced by bad luck, bad choices, a lack of education and the isolation that allows the poor to remain invisible and adrift in lonely, distant orbits.

“It feels the same to us,” Ms. Vargas said of life amid the oil frenzy.

“The money that they have, we didn’t have it before. And we don’t have it now.”

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Judy VargasJudy Vargas

Judy Vargas lives in the colonia of Gardendale, Tex., with her grandmother and three young children, whom she supports by cooking at a local restaurant.
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Gaps in Improvements
Early one morning, after putting on makeup underneath a copper-colored strip of flypaper that dangled from the bathroom ceiling, Ms. Vargas slid her youngest child, Isaac, 5, into the back seat of her car.

Her shift at the restaurant, a steakhouse in Cotulla where she made $9 an hour, would start soon, and she first had to drop Isaac off with a relative while her two older children were at school.

As Ms. Vargas approached the railroad tracks, on one of Gardendale’s few paved roads, she slowed the car. A thick coating covered the street. “It’s sand,” she said as she drove over it, “but from where?”

Overnight, a truck carrying sand used for drilling wells had dumped some of its load.

The fracking sand — so powdery it seemed scooped from an exclusive beach — stretched for about 100 yards on roads outside homes and the Gardendale Qwik Stop, the colonia’s lone store. In 2012, federal health officials issued an alert about the health hazards workers faced from exposure to fracking-sand dust. Breathing so-called silica dust can cause silicosis, a lung disease.

No one was sure if the sand had been left by accident or on purpose, but people suspected that the driver of an overweight truck had lightened his load. They are unlikely to find out. Gardendale has no mayor, no police department, and only a handful of tilting signs and streetlights. It is often used as an illegal dumping ground.

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Frac Sand Dumping

Frac Sand Dumping

Nora Flores and a local worker discuss a 100-yard trail of frac sand dumped in front of her Gardendale Qwik Stop convenient store the night before.
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An estimated 500,000 people live in about 2,300 colonias in Texas, along its 1,200-mile border with Mexico. Many colonias have benefited from infrastructure improvements in recent years. Others remain institutionalized shantytowns without basic services like water and sewers.

At least in part because of the oil economy, Gardendale is one of the better-off colonias. The Federal Reserve Bank of Dallas found in a report to be released this year that 42 percent of the population of colonias in six Texas border counties — not including La Salle — lived below the poverty line, compared with 14.3 percent nationally. The median annual household income was $29,000. In La Salle County, other studies have shown that 39 percent of children live in poverty.

The boom has both given and taken away. School officials bought 1,300 iPads, one for every student in the district. And there are jobs — well paid in the oil fields for some, marginal in fast food joints and cheap motels for others.

But oil and gas have brought a new set of problems, including environmental concerns. During the peak ozone season in 2012, Eagle Ford operations in La Salle County daily emitted 12.8 tons of nitrogen oxides and 28 tons of volatile organic compounds — pollutants that produce smog and can cause health problems — according to a report prepared by the Alamo Area Council of Governments.

There have been 11 motor vehicle fatalities in La Salle County this year, up from two in 2007, which officials blame in part on a population boom and increased traffic from the oil and gas activity.

Rents have skyrocketed. Newly hired teachers had such a hard time finding housing they could afford that the Cotulla school district opened its own trailer park for them.

Texas has reaped tremendous financial benefits from oil and gas. But the poor in the colonias seldom own the leasing rights for the natural resources that lie under the ground they live on. One-third of Texas’ $48 billion in tax revenue last year came directly or indirectly from the oil and gas industry, said Bernard Weinstein of the Maguire Energy Institute at Southern Methodist University in Dallas. Portions of the revenues go into the state’s general fund as well as its so-called Rainy Day Fund, but very little of it is spent on social services and programs to assist the poor, although some helps finance public schools and universities.

So, despite the boom, Texas has some of the highest rates of poverty in the nation and ranks first in the percentage of residents without health insurance. Republican leaders have supported tapping the Rainy Day Fund for one-time investments in water and transportation infrastructure, but they have blocked attempts to use the fund for education and other services, arguing that it was designed to cover emergencies and not recurring expenses.

“Despite the bounty of the Eagle Ford, which is considerable and on the whole clearly positive, it is not a rising tide that lifts all boats,” said Ray Perryman, a leading Texas economist and author based in Waco.

He noted that Texas had long had a philosophy of limited government and an aversion to spending on social services, an attitude intensified by the current political environment.

“Texas is not a good place to be poor, and there is little political appetite for change,” he said.

Surrounded by Activity
One day in May, Colt Ringer, 28, limped along near Ms. Vargas’s trailer wearing a dusty black cowboy hat and carrying a .22-caliber Magnum revolver and .45-caliber pistol in holsters at his hip. He was returning home empty-handed after hunting feral hogs, which he kills for sport and for food.

“All of us are poor, in our own way,” he said. “I don’t get nothing off these wells right out here, because I don’t own the land. That just goes to show the golden rule: He who has the gold makes the rule.”

The people of Gardendale, first settled in 1908, are an isolated, eclectic lot. Some are poor, but others are lower middle class. Goats are kept in the front yard of one house; a Cadillac is parked at another.

In 1996, Ms. Vargas’s grandmother, Ernestina Salinas, 68, paid just $300 for the lot they live on. Using $1,000 she made picking fruits and vegetables in Minnesota, she bought a run-down trailer that lacked running water and electricity. In 1998, a flood destroyed the trailer, and the Federal Emergency Management Agency provided her with a more modern one that she has frequently renovated.

At one point recently, 10 relatives were living in the trailer. Ms. Vargas and her three children slept on one king-size bed. Ms. Salinas, who has heart problems and diabetes, slept with a cross over her bed in a room awash with the fragrance of incense.

Lately, the family has been living on about $250 a week. Ms. Salinas receives an additional $500 monthly in Social Security benefits, but over all those inside the trailer rely very little on public assistance.

Medicare pays most of the cost of Ms. Salinas’s drugs, but with co-payments she pays roughly $40 a month for medicine. Ms. Vargas said she had no health insurance, and pays for most of her medical bills out of pocket. They rarely follow the news, but in a state hostile to President Obama’s health care law, they do not understand the law and get the impression it is a shambles. No one in the family has applied for health care subsidies.

There is disagreement among officials, oil company executives and economists over why poverty persists amid the boom in the Eagle Ford counties.

La Salle County’s top elected official, County Judge Joel Rodriguez Jr., said the boost in property and sales tax revenue from Eagle Ford activities had been offset by increases in county spending on road repairs, law enforcement, fire safety and administrative functions. He was critical of the support the oil and gas industry had provided to the poor.

“The oil companies come by for Thanksgiving with turkeys, or they may have a function to have pictures taken to show the world they are socially responsible and then you’ll never see them again,” Mr. Rodriguez said.

But Mr. Rodriguez and others were skeptical of those who were unemployed in a region teeming with jobs and new businesses.

“The fact is we are handing out big checks to people, and we are still short on people who want to work,” said Chris Faulkner, chief executive of Breitling Energy, an oil company that operates in La Salle County. “I would think that if I was living in one of these colonias, I would be running for the opportunity to say, ‘This is my big chance, and I am going to jump on it,’ but they are not doing that.”

But at the trailer, there was much more focus on getting through the days than on getting ahead.

Late last year, Ms. Salinas returned from working the fields in Minnesota to find that squatters and scrap metal thieves had broken into the trailer. They stripped off the trailer’s electrical wiring, stole the water heater and left behind food and dirty dishes. Ms. Vargas, who has lived in the trailer off and on since she was 10 or 11, returned to Gardendale from Dallas with her children and her common-law husband, worried about Ms. Salinas’s safety.

Life, it seems, is lived one step ahead of disaster. One day, sheriff’s deputies came to the trailer after a dispute that began when the girlfriend of Ms. Vargas’s cousin left a 10-month-old baby by the side of the road in front of the trailer.

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Yoland Aguilar

Yoland Aguilar

Heavy oil rigs pass Yolanda Aguilar’s house in Gardendale both day and night. She hoses the unpaved road each morning to keep the dust down.
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Some days, Ms. Vargas appreciates the colonia’s quirky isolation.

Other times, in a trailer held up on the dirt by concrete slabs, next to the pile of ashes where they burn garbage because no one picks it up, ordinary life seems extraordinarily hard. By June, the temperature was already above 100 as she drove through town. She rolled down all four windows — the air conditioner was busted — and dust from the 18-wheelers filled the car like cigarette smoke, coating the Bible she kept inside.

A Hard but Satisfying Life
In early June, Ms. Vargas was at the kitchen table opening a box of cake mix. Her husband, Erick Olivares, 28, lit the charcoals in the rusty barbecue grill outside. The children splashed in a plastic pool.

They were having a cookout. Mr. Olivares had been released from jail several days earlier. The crosses he had made for her and the children in jail hung from strings around the trailer.

Ms. Vargas laughed more, smiled more than she had in weeks. “I am very happy,” she said as she cracked the eggs for the strawberry cake.

“Why wouldn’t I be? My life is complete.”

Mr. Olivares had spent six weeks in jail on charges of marijuana possession. He was optimistic about finding a job, but had not yet done so. He was reluctant about working in the oil fields. “It crossed my mind,” he said. “It pays good, but I don’t want to lose my arms or hands for that kind of money.” Later, he gave another reason: “When you’re a convicted felon, they ain’t going to hire me.”

Ms. Vargas quit her job at the steakhouse and returned to a place she had worked before — the motel where her grandmother is a maid. She cleaned rooms and pressed shirts for $9 an hour, and got a second job as a waitress at another restaurant in Cotulla, earning $5 an hour, plus tips. Some days she worked at both jobs.

But the family was falling behind financially. It cost more than $2,400 to bail Mr. Olivares out of jail. Ms. Vargas had paid $820 but still owed the rest. When Ms. Salinas had hired a neighbor to rip out the cracked particleboard floor in the trailer and put in faux-wood flooring, one of Ms. Vargas’s children had thrown the man’s car key into a smoldering fire they had made outside to burn some trash. Ms. Vargas owed the man $300 for a new key and the cost of a tow. Her cellphone service was cut off when she failed to pay the bill.

Ms. Vargas dreams her children will have a better life. “I wouldn’t want my kid to be in no motel and no restaurant, getting paid minimum wage,” she said.

One Wednesday evening, Ms. Vargas drove her children and her grandmother to the Living Faith Family Worship Church in Cotulla, which she had recently begun attending.

One of the ushers was a recovering drug addict. The pastor, Mark Linares, runs a barbecue stand outside his house. Ms. Vargas and her family walked in late, as Mr. Linares asked the audience to pray for a truck driver whose daughter-in-law was in a coma.

Everyone filed out of the red brick building, where there is a plaque by the front doors. Ms. Vargas and Ms. Salinas did not notice it. This was the old schoolhouse where President Johnson first saw extreme poverty in 1928. During the collection, the worshipers had passed around a basket. Ms. Vargas contributes when she can. This evening she had nothing to put in.

http://www.nytimes.com/2014/06/30/us...s-in.html?_r=0