WTEC attempts to guide region in potential growth

December 14, 2013

Victor Carrillo

Former Texas Railroad Commission Victor Carrillo said his strong desire to see economic development in his hometown and surrounding area led to his acceptance of an offer to serve as chairman of the West Texas Energy Consortium.
The new organization will attempt to guide the region’s communities through the potential growth and subsequent problems that may develop from the growth spurred by an oil boom.
Carrillo, who was a professor at Hardin-Simmons University, a city councilman and Taylor County Judge, in his hometown of Abilene, spent 2003 to 2011 on the Texas Railroad Commission, twice serving as chairman of the agency that governs the state’s oil and gas industry. He is now president and chief operating officer of Zion Oil & Gas, Inc., a Dallas-based company that is exploring exclusively in Israel, and also serves on the board of directors of Magnum Hunter Resources, a Houston-based exploration and production company that is active in the Marcellus Shale in Pennsylvania, Utica Shale in Ohio and Bakken Shale in North Dakota, three of the nation’s most prolific shale plays.
But when he learned of the formation of the West Texas Energy Consortium, which was initially called the Cline Shale Consortium, Carrillo said he jumped at the opportunity to get involved.
“When I heard about the consortium, I gave Mary Ross (executive director of Workforce Solutions West Central Texas) a call,” he related. “I feel strongly that economic development is really important for not only Abilene but also the smaller towns like Sweetwater, Snyder and Big Spring. I called to say I was interested in participating on a committee if I could help. We started having conversations, and ultimately it was proposed that I serve as chairman. I visited with the founder of the company I work for now, and I said I view this as public service. He said you need to stay involved and gave his blessing for me to work with the consortium. My day job is involved in Israel, but this way I can stay connected with my roots, too.”
Sterling County Judge Ralph Sides served as the initial chair of the consortium, but Carrillo said Judge Sides stated someone else needed to take over to move the organization forward to the next level.
The original plan
As news of the potential of the Cline Shale began to develop, Ross said the Texas Workforce Commission provided funding collectively to the Workforce Solutions West Central Texas board in Abilene and the Workforce Solutions Concho Valley board in San Angelo and separately to the Workforce Solutions board in the Permian Basin to focus on the oil and gas initiative.
She pointed out that initially $1.5 million was given to the community colleges in the region, including Midland College, Odessa College, Western Texas College, Howard College, Cisco College, Ranger College and Texas State Technical College-West Texas to develop training programs for jobs needed in the oil and gas industry.
“We also decided to form a consortium, originally around the Cline Shale,” Ross explained. “But we figured out quickly from the folks in the industry that the Cline Shale is just another play. There are other plays going on, such as horizontal drilling in the Wolfcamp. This was something huge.”
So the name was changed to the West Texas Energy Consortium. The 39-county consortium is voluntary and free for members. It is supported by the three Workforce Solutions boards as well as economic development and community partners in the West Central Texas and Concho Valley regions, including Abilene, Brownwood, Early, Colorado City, San Angelo, Snyder, Big Spring and Sweetwater.
Economic impact
One of the things that the West Texas Energy Consortium decided to do with its funding, according to Ross, was to commission an economic study. Thomas Tunstall, research director for the Institute for Economic Development at the University of Texas at San Antonio, is doing the research. He authored a similar report for the Eagle Ford Shale in South Texas.
“The first phase of the study will look at how the oil boom can affect the Cline’s supporting counties, such as Taylor, Brown, Coke, Runnels and Tom Green,” said Ross.
Tunstall presented his findings at a meeting of the consortium on Dec. 3, in Big Spring.
Ross said the second phase of the study will focus on the primary counties where most of the drilling is expected to occur, including Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry and Sterling counties. The second phase will be completed in mid-February, and Ross said the consortium will then publish the complete report at that time.
“We are hoping that the report will look what the economic impact of the oil boom will be from projection of people moving into the region, construction and actual production numbers,” Ross continued. “This will develop a baseline of what it will mean for jobs, housing, education, training, health care and other impacts. There is a lot of outgrowth.”
She said a group from the consortium is going to travel to North Dakota to learn what lessons can be learned from the Bakken Shale oil boom in an effort to avoid the same mistakes made by officials in that state.
While Cline Shale drilling activity hasn’t yet ramped up, Ross said there are plenty of things going on, including ground to be broken soon on a new natural gas power plant in Colorado City, a pipeline being built from Colorado City to the Gulf Coast refineries and the groundbreaking for the BNSF Railway Logistics Center recently in Sweetwater.
“There is a lot of construction and activity going on,” she added. “You see a lot more white pickups going up and down the highway with out-of-state license plates and oil company names on the side and lots of trucks on the road hauling pipe.”
Ross noted that the construction of a Super Wal-Mart in Snyder and a new Family Dollar store in Sterling City are just two more examples of the positive impact of the coming oil boom.
In the next year, Ross said she expects the unemployment rate to decline, wages to go up, demand for certain employees to increase, certain jobs to become more difficult to fill, and healthcare demands to increase because of more people working in hazardous jobs.
Providing assistance
Carrillo said he sees his role with the West Texas Energy Consortium “to work with other folks involved to enhance what has already been done and to move forward.”
“The ultimate goal is to collectively build symmetry to do things that individual communities can’t do on their own,” he explained. “We don’t want to re-invent the wheel. For example, if one city had to do zone changes, they can share that information with other cities.”
Carrillo said the consortium also want to be a clearinghouse for the public and those in the industry. It recently launched a web site, westtexasenergyconsortium.com, but he said he hopes the web site will be expanded in the next year.
“It is a voluntary association, and we have several committees,” he continued. “Ultimately those committees will need input from the public in suggesting solutions. We want to make the web site a place for people to go and get information as well as provide information.
“Our mission as a consortium is to promote and encourage responsible growth. Our committees will focus on healthcare, public safety, transportation and housing. That is a broad umbrella. I know we can’t solve all the problems, but I hope we can make headway on those potential problems.”

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