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Gas boom stirring up life in loneliest county

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SHANEA

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Gas boom stirring up life in loneliest county
« on: October 15, 2006, 02:13:47 PM »
http://www.chron.com/disp/story.mpl/metropolitan/4243484.html

Quote
Oct. 8, 2006, 5:57PM

Gas boom stirring up life in loneliest county
World's largest energy companies are exploring the barely populated West Texas desert
By MARK BABINECK
Copyright 2006 Houston Chronicle

MENTONE If nothing else, Delores Smith says the drilling rig across the street has spiced up Mentone's nightlife.
 
"We kept hearing what we thought were gunshots, and they were shooting fireworks around the rig," said Smith, 77, recalling this year's amateur July Fourth festivities put on by workers. "It was pretty, but I guess it could have been dangerous, too."

Smith and her husband, 87-year-old Kenneth, are both decadeslong residents of this desolate West Texas area and acknowledge not much happens in the least-populated county in the United States. By Sheriff Billy Hopper's count, Loving County has 81 residents, which amounts to about eight square miles per person. It has never even had potable running water.

Things could be changing, though, now that Loving County turns out to be centered in one of the nation's hottest natural gas plays, attracting some of the world's largest energy companies. Rigs like those shadowing the Smith home in Mentone (population 18 ) are prowling this part of the Chihuahuan Desert between the Big Bend and the New Mexico line, and more are on the way.

An open question, though, is whether this latest boom will help populate this desolate pocket of the Southwest or if Loving County's best chances to shake its lonely claim to fame already passed it by.

Human settlement always has been a challenge amid the rocky scrub along the salty and once-temperamental Pecos River. According to The Handbook of Texas, the area had hosted little human activity except for nomadic hunters until it was settled in the mid-1800s, then quickly abandoned.

The county is named for cattleman and Indian-raid victim Oliver Loving, who blazed a prominent cattle trail in the 1860s with Texas rancher Charles Goodnight. Loving County was organized in the 1890s by shady speculators out of Denver, then abandoned after their scheme collapsed.

By the early 20th century, much of its 671 square miles was in absentee ownership, a tradition that continues today, and the extreme summer heat, winter cold and lack of fresh water made it unattractive for large-scale settlement.

Oil exploration created a boom in the early 1930s, when the population peaked around 600, but it already was half that by 1940 and since then has declined to the current level.

It's that history that causes Hopper, an area native who also serves as tax collector, to curb his excitement when he surveys Mentone's rig-studded skyline.

"Before we can really do anything, we're going to have to get some kind of industry that's maybe completely divorced from oil and gas, but would utilize the gas, some type of manufacturing, et cetera," Hopper said. "I don't know what it would be, but that's the kind of industry you need."

Then he sighed a bit.

"The lights are always brighter in the bigger places," said Hopper, who knows of what he speaks, having worked in 72 countries during a 21-year career with Houston-based Imco Services, a division of Halliburton Co., before returning to Loving County.


Two failed projects

By Hopper's count, Loving County had two chances last decade at attracting something besides ranching and petroleum extraction. He blames politics for killing both.

The first project, a hazardous-waste facility dubbed Loving County Disposal, was designed to inject various types of waste "pickle vinegar, acetic acids, stuff from under sinks in homes" into two 8,000-foot-deep wells. There was local opposition, but Hopper said the facility was in the last stages of permitting in 1991 and on the verge of construction.

Then the new governor, Ann Richards, stopped such permits until further review.

"That would have been a great boon to us," said Hopper, who said a new subdivision just outside Mentone was platted and might have blossomed had the nearby waste operation gone forward.

It finally won approval once Richards was out of office, but Hopper said it was too late.

"(The company) started having intramural squabbles, and it never got started," he said.

Then along came Envirocare of Texas, which wanted to build a low-level radioactive waste dump in West Texas and pinpointed a site on the line between Loving and Ward counties as one of three candidates.

However, neighboring Reeves County helped finance an anti-dump effort and, in 2000, Envirocare scuttled its Texas aspirations altogether.

"They got it defeated," Hopper said, unable to disguise his disgust.

Besides the agricultural and energy mainstays, all other economic activity ground to a halt in Loving County. The last time any taxable retail sales were reported to the state was 2004.


Peaceful no longer
The natural gas boom has shattered the usual peace and quiet of Loving County's squat 71-year-old courthouse. Hopper says anywhere from two to 20 landmen agents who scan title records on behalf of prospective drillers can be found wandering the modest building.

Geologically speaking, two types of drilling are sparking interest in several promising pockets across the country, including Loving County. Some, such as large independents Anadarko Petroleum and Chesapeake Energy, are focusing on "tight gas," which is highly pressurized inside dense sand deposits that have low permeability. Others are drilling hard shale beds, which are more prominent in neighboring counties.

Neither technique was considered worthwhile until market prices rose sharply this decade while technology caused drilling costs to fall.

"We're still ramping up. I can't really speculate how long that would last, but there are some really great wells out there, high producers," Anadarko spokeswoman Susan Richardson said, adding that her company has partnered with Chevron to explore the region.

Anadarko is running about 10 rigs continuously and intends to have 13 eventually.

Hopper praised Anadarko for being a solid corporate citizen, building quality dirt roads, allowing the Sheriff's Department to use its communications tower and volunteering to fight fires.

"If we had grass fires anywhere and they're close, you give them a call and they'll send water trucks to help out," Hopper said. "We had three grass fires (early this year), and not any of them got to any size at all because somebody got there quickly."


Prosperity is near, maybe
If the region pans out like some think and if prices continue to make exploration feasible Chesapeake spokesman Tom Price said rigs could become fixtures on the horizon for a generation.

"The towns will grow and prosper as workers pour into (them) and as natural gas royalty revenues fill the pockets of ranchers and other land owners," Price said via e-mail. "If successful on a large scale, drilling could continue over a 400-500 square mile area or more for 10 to 20 years from now, or longer."

Years ago, Hopper said, some landowners thought they were making easy money by selling mineral rights for $10 or $15 an acre "here in the middle of nowhere."

"I do know the last ones that were leased, the royalty was running $500 an acre," Hopper said, referring to the process by which people allot subterranean rights to production companies. "Three years ago, I leased my property at $75 an acre, and I didn't think that was too bad."

A century of tangled sales and hand-me-down titles has created some unexpected windfalls. Hopper recalls one Denver woman who learned she had rights to 40 acres of productive earth and "didn't know a thing" until a landman called her.

Another time, the Nebraska Attorney General's Office called wondering whether someone in Midland was trying to scam folks there with wild tales of natural gas riches. Turns out, it was all true, and those wary Nebraskans won a lottery of sorts.

"It's better than a lottery," corrected Hopper, who estimates the exploration boom which is generally moving east to west across the county as seismic devices map the underground could bring the county's tax valuations to $1 billion soon, nearly triple from about $340 million in 2004.

The surge in revenues is allowing Loving County to do things it's never done before, such as pipe in fresh water from a well east of unincorporated Mentone. Potable water traditionally has been hauled in from elsewhere Kenneth Smith did just that for 18 years but gas-fueled coffers are allowing the community to try such projects.

Whether potable water, low taxes and desert living will be enough of a draw to bring anything or anyone else here remains to be seen, though.

Hopper would love to see his boyhood home finally blossom. Others will take it or leave it.

"I think it would be nice in a way to have more people out here," said Delores Smith.

But for now, her 10 or so hounds will continue to nearly outnumber the townsfolk.

mark.babineck@chron.com

 


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