Eagle Ford Shale Oil Boom Leaves Poverty In Its Wake
By Ann Choi
For Reporting Texas
GONZALES – On a chilly February morning, a pickup truck pulls up to a converted gas station near the city’s downtown. Two elderly men, each wearing two jackets against the cold, enter the office of the Gonzales Christian Alliance Ministry.
“The cold really caught you by surprise, huh?” says Beatrice Navejar, assistant director of the ministry.
As the men fill out paperwork, her husband, Mike Navejar, takes groceries — onions, potatoes, meat and canned tomato sauce — from the refrigerator in the rear of the building and loads them onto the men’s truck.
Gonzales, a town of about 7,200 about 65 miles southeast of Austin, sits above the Eagle Ford shale, one of the most active oil drilling areas in the United States. Since 2008, when drilling first took off, the Eagle Ford has pumped billions of dollars of investment and thousands of high-paying jobs into a 20-county swath of South Texas, bringing new prosperity to a rural area.
Gonzales County’s sales tax revenue shot up from $601,067 in 2008 to $3.5 million in 2013, according to the Texas Comptroller’s office. Wells in the county have produced nearly 80 million barrels of oil, second only to Karnes County.
But in the middle of one of the biggest oil booms Texas has ever seen, some people are struggling, needing public assistance to get food, housing and health care.
“We have more homeless people now than ever before,” said Lupe Saldana, a volunteer for the ministry since it opened in 1998. The ministry helped an average of 180 families a year until last year, when it jumped to 300 families, according to Beatrice Navejar.
“Tripled, I’d say. She was being nice about it,” Saldana said. “There are lots of new people coming here and asking for help.”
The Eagle Ford boom has attracted people looking for jobs and a better future. However, not everyone is finding a well-paying oilfield job. In addition, faced with rapidly rising living costs, more workers are asking for help in towns where there is little or no social service infrastructure.
Most counties in the Eagle Ford shale have seen a decrease in food stamp participation. However, Gonzales County saw an increase, from fewer than 3,000 people on average in 2008 to 3,300 last year, according to the Texas Health and Human Services Commission. The picture is similar in nearby Wilson, DeWitt and Atascosa counties, also in the Eagle Ford shale.
“Our local offices in the Eagle Ford Shale play have heard from an increasing number of people who mention they moved to the area looking for jobs in the oil and gas industry, but were not successful,” said Linda Edwards Gockel, a spokesperson for the Health and Human Service Commission. “These people then need … food benefits when it doesn’t work out.”
In addition to people coming from out of town, locals have been squeezed by the boom. Betty Wharton, a secretary for the Gonzales United Methodist Church, said that while some residents with the necessary education and skills have found jobs with “a really good salary,” just as many have not.
“They still can’t find jobs, but the rent keeps going up,” Wharton said. “These folks have especially a hard time paying electricity bills or rents.”
Wharton said local churches are seeing more people going from one church to another asking for help. To improve social services and prevent abuse, churches make financial contributions to the Gonzales Christian Alliance Ministry and direct incoming inquires to the nonprofit rather than handling them separately. Neither the city of Gonzales nor Gonzales County runs a social service or community center.
Along with the increased demand for social services has come a greater need for health care services.
“The oil boom has brought big changes,” said Henry Salas, CEO for Community Health Centers of South Central Texas. The organization, the area’s only federally accredited provider for uninsured patients, has clinics in Gonzales, Luling, Seguin and Victoria. They provide primary care, obstetrics and gynecology, and dental and mental health services. Last year, a record 15,000 residents used the center’s services.
Salas said there has been both an influx of new patients and an increase in those without insurance. Between 2012 and 2013, the uninsured patients rate rose from 43 to 68 percent; two-thirds of the patients the center sees have no insurance. Salas said most of the uninsured patients are making little more than the minimum wage and can’t afford to buy insurance. The clinic is unsure how the Affordable Care Act will affect its mostly low-income clientele, especially since Texas did not expand Medicaid.
“Even though they are working, they are not the types of workers who get the $85,000 or $90,000 jobs that people talk about,” Salas said. “They are subcontractors. They are not actually working for the oil companies, so they don’t get any health benefits.”
The increased patient count has translated into higher costs for the clinics. The center operates primarily on federal and state grants and private donations. It does not get any county or city level funding.
“It’s causing us to be very creative with how we provide health care because you can stretch a dollar only so far,” Salas said.
The county, with only about 21,000 people, doesn’t have the resources to offer the clinic any help. Last year, it spent about $8,000 on indigent services, mostly for burials, County Judge David Bird said. State and federal grants, along with donations, are enough to manage the increased social service demand without increasing the county’s budget, Bird said.
“I just don’t see the need for it yet,” he said.