Midland Booms amid Surging Energy Industry

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Houston, and to a lesser extent, San Antonio, have gotten their fair share of attention as Texas energy cities that are benefitting from the current oil boom. However, farther west is a city – Midland, Texas – that very probably owes its existence to the energy industry like few other cities. Even the city’s motto – Feel the Energy – hints at the link between the city and the energy industry.

Midland – also known as the Tall City for its downtown skyline, which stands in stark contrast to the surrounding terrain – is located in the fossil fuel-rich Permian Basin. About one-fifth of the nation’s petroleum and natural gas output comes from the Permian Basin, making it one of the most productive formations in the United States, according to the U.S. Department of Energy’s Top 100 Oil and Gas Fields.

Over the years, Midland has expanded and contracted through several energy cycles. A scan of the Yellow Pages today shows that Midland, which is part of the Midland-Odessa, Texas Combined Statistical Area, has more than 1,300 energy companies, largely thanks to the resurgence in the energy industry over the past few years.

Midland Booms amid Surging Energy Industry

During the current energy boom, the city’s population has grown substantially. Over a three-year period, Midland’s population is estimated to have grown from the 2010 U.S. Census Bureau figure of 111,147 to a population of around 135,000 in the city of Midland, and an estimated figure of as high as 165,000 for Midland and the surrounding area. However, despite the growth, there have been times when there were not enough workers to meet the demand. In 2007, for example, the Midland Chamber of Commerce said that there were about 2,000 more Permian Basin jobs available than workers to fill them. As of July 2013, Midland County was the fastest-growing metropolitan area in the country, according to the Census Bureau.

Midland is in the news frequently these days, as new and established energy companies alike announce plans to move to, expand, or open their doors in Midland. True Oil Co. LLC, for example, is a newly formed, Midland-based oil and gas acquisition and development operating company that announced in early December that it had secured $500 million in commitments for equity capital to acquire and develop oil and gas assets in the Permian Basin, a company press release said.

 

The same week as the True Oil announcement, Ring Energy Inc., another Midland-based oil and gas exploration, development and production company, announced the sale of 5.75 million shares of common stock, resulting in net proceeds of approximately $54.3 million to fund drilling and development of its properties, and to pay for additional leases of oil and gas properties, a press release said.

In addition, Plains All American Pipeline L.P. said in a Dec. 10 press release that it will invest $400-500 million in the Permian Basin on pipelines and increased pumping capacity.

Green Century Resources, LLC is yet another oil and gas exploration, production and technology company that is headquartered in Midland and focusing on oil development in the prolific Permian Basin.

Not all the news is about what is under the ground in Midland. A new downtown office tower, Energy Tower, is planned for Midland’s new Center City. The $350 million Energy Tower will have more than 990,000 square feet of Class A space to Midland and Permian Basin business needs. When completed in 2015, Energy Tower will rise 870 feet above the ground, which will make it the sixth-tallest building in Texas, according to highrisefacilities.com. Estimates are that Energy Tower will be visible for 30 miles, giving new emphasis to Midland’s nickname of Tall City.

Another major development project is energy major Chevron Corp.’s Midland Campus. The $100 million Midland Campus, which is expected to be completed in 2015, will accommodate about 800 employees and will have about 340,000 square feet of space. Chevron is hoping to attract talented new employees, and to support future growth in the Tall City, according to a press release by Swinerton Builders Texas, the builders of Chevron’s new facilities.

The Energy Tower and the Chevron Midland Campus are but the latest symbols of the link between Midland and the energy industry, and they indicate the level of confidence that the industry has about the future of the city’s oil-driven economy.

SUSTAINABLE GROWTH FOR MIDLAND

The current boom in Midland is not driven by speculation, said Nellwyn Barnett, Midland Chamber of Commerce executive vice-president of Chamber Relations said.

“We have a very good long-term [economic] outlook. This is being driven by actual production, and technology makes this level of production more likely to be sustainable. Some Midlanders who have lived here a long time are understandably a little tentative, but the company investments in new development show how confident the industry is. They don’t make these decisions lightly,” Barnett said.

Barnett noted that one sees more and more out-of-state license plates, from New York to Alaska, Wyoming and Michigan. Midland was also getting a lot of national and even international attention, which is new.

“Oil and gas is and will continue to be our bread and butter, but we’re trying to diversify,” Barnett said. “Aerospace is another industry that we have now. It’s a good compliment to energy because of the need for people with similar skills, while still being a different industry.”

Perhaps the greatest threat to Midland’s economy, Barnett said, was some sort of federal legislation that could affect the energy industry. However, she noted that Texas has been more proactive than many states in conducting business in an environmentally friendly way, thus reducing the likelihood of legislation that would affect the industry and ultimately the city.

Read more at: Rigzone

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