As the Permian Basin keeps expanding, both in activity and in geographic reach, the city of Lubbock comes more into play.
By Al Pickett, special contributor
When one thinks of Lubbock, the first things that probably come to mind are the twin facts that the Hub City is home to Texas Tech University and the center for the agricultural industry on the South Plains.
“That is the perception of a lot of people,” acknowledged John Osborne, president and chief executive officer of the Lubbock Economic Development Alliance, who claimed Lubbock is also primed to become a key player in the Permian Basin’s oil and gas industry. “When you think of the Permian Basin, you obviously think of Midland/Odessa. But Lubbock has a lot of positive things going for it.”
One of its advantages, according to Osborne, is the “sheer size of Lubbock’s population.”
“The oil and gas industry has a difficult time recruiting workers [during the current boom in the Permian Basin],” he explained. “It is easy to travel from Lubbock to the Permian Basin and where the activity is. Our population base includes 285,000 in our county alone.”
Osborne added that Texas Tech’s degree programs and the certificate programs available at South Plains College in nearby Levelland allow the Lubbock area to “funnel the right type of labor where they are needed.”
Although the current oil boom in the Permian Basin certainly has been centered in the Midland Basin, exploration and drilling activity is spreading out from the potential Cline Shale on the eastern flank of the Permian Basin to the horizontal drilling in the Wolfcamp and Bone Spring in the Delaware Basin in far West Texas and southeastern New Mexico.
What about to the north? Phil Brewer, a territory sales manager for Yellowhouse Machinery Company in Lubbock, pointed out that there is ongoing exploration in the area surrounding Lubbock as well.
“Most recently, the county approved permits for seismograph teams to begin exploration north of Lubbock,” he noted. “I believe all formations are being explored, and once the information is gathered, the decision of conventional vertical drilling or horizontal drilling will be made according to information provided for the area. I think horizontal and vertical drilling will both be utilized in the immediate Lubbock area.”
“We hear about the Cline Shale, and the Wolfcamp is getting discussion,” Osborne responded when asked what he believes is drawing the increase in activity in the Lubbock area. “I have been looking at the active rig counts to the west of Lubbock and to the south and southeast of Lubbock.”
Rental companies such as Yellowhouse Machinery are among the first to get a feel for what activity is taking place since they offer equipment for clearing and building pits, leveling drilling pads and roads, and getting compaction on roads and pads, as well as excavators for deep buries after the rig and frac have been completed.
Howard Garlington, a territory sales manager for Yellowhouse in Lubbock, said his company inventories dozers, loaders, excavators, motorgraders, compact/track loaders, skid steer loaders, forklifts, and belly dump trailers for rental or purchase, as well as both in-house and field service to keep its customers up and running.
“Our 724K loader is also popular in West Texas for rig-moving companies,” added Jeff McCollum, another territory sales manager for Yellowhouse.
Ready For Growth
Both Osborne with the LEDA and Brewer with Yellowhouse believe that Lubbock is poised for a “breakout” related to the growth of the oil and gas industry.
“I have spoken with the local county and city decision-makers on this subject,” Brewer offered. ‘The county is preparing for additional truck traffic by planning and budgeting for roads with a stronger base to handle the additional weight and traffic count. There are numerous projects within the city to add housing and apartments to accommodate growth.”
Yellowhouse Machinery, which also has locations providing service to the oil and gas industry in Midland/Odessa, San Angelo, and Abilene, is “well aware of the needs that will come with growth in Lubbock and the surrounding area,” Brewer continued. “We will plan accordingly to accommodate the needs of our existing customers and also to anticipate the needs of new relationships that form.”
Osborne touted the fact that the LEDA has made a $3.2 million rail and infrastructure investment in its rail port and has 333 acres available for development in its business park.
“In the late 1990s, the rail was extended to the LEDA’s rail park north of the Lubbock airport,” he recalled. “Not much has happened since we landed the corn tortilla manufacturing plant there, but we received a grant to put in streets and utilities between the two spurs.”
Osborne said the rail park is not just for bringing in sand or shipping out crude oil. It is also a prime location for other oil-related companies, such as tank manufacturers. He added the PYCO, the short rail line that serves Lubbock, also offers additional opportunity for companies to locate along its line with the benefit of rail service.
The LEDA is working with the Byron Martin Center, a program in the Lubbock Independent School District that offers students dual credits in job-related training programs such as nursing, software, and the oil and gas industry, according to Osborne.
“It is offering welding, truck driving classes, or anything that will help supply the labor force with the right size skills,” he emphasized. “There is no lack of students to go through the program.”
He added that the LEDA has partnered with the South Plains Workforce Solutions, too, in putting on job fairs and career days to help “employers and future employees find each other.”
Other area communities are also trying to take advantage of the projected growth of the oil and gas industry.
“There are a number of new wells drilled around the Levelland area [in Hockley County] with more planned in the future due to the price of oil,” added Garlington. “They have opened a new business park on the east side of Levelland with rail service available. Several companies are expanding into this area, with plenty of room for other new companies to move in and set up operations.”
Brewer said the last couple of years have seen numerous oilfield supply and service companies building locations in the Lubbock area.
“In dealing with large operating and service companies on a daily basis, I have learned the future plans for these companies include opening ‘headquarter-type’ locations in Lubbock,” he added. “These decisions are made primarily due to the fact that Lubbock is centrally located in the expanding oil fields, therefore easy to transport materials, etc. Lubbock has a very good infrastructure and amenities that will continue to attract people and business. The Lubbock community will accept the anticipated growth with ‘cautious’ open arms. The oilfield growth will happen slowly but surely. In eight to 10 years, I believe Lubbock will be a growing hub for the oilfield industry.”
“We have been experiencing a boom for a while,” he asserted. “We have had just the right amount of additional companies moving here and existing companies’ growth. Our unemployment rate is five percent and our labor force rate has been growing at one percent a year. That is good, solid growth. It helps in having Texas Tech and the other universities here. We have a ready supply of labor.”
Lubbock’s populace is primed to be key players as the booming Permian Basin oil and gas industry continues to expand.