Shale boom creates housing boom in South Texas

San Antonio Express-News/Houston Chronicle:

Marcelino and Hope Costilla used to watch rabbits, quail, deer and the occasional fox from their front porch rocking chairs.

Now they look out onto a 20-slot RV park, a new business venture for the couple that represents their slice of the Eagle Ford shale play.

Across cities in sparsely populated South Texas, hotels have no vacancies, small apartment complexes are full, and mom-and-pop RV parks like the Costillas' are popping up (and filling up) seemingly overnight to catch the overflow of oil field workers pouring into the area.

The overnight-millionaire money came as mineral rights were leased to oil and gas giants along the 400-mile-long Eagle Ford shale formation, which lies under 24 counties and sweeps from the border across the state to East Texas. But as Eagle Ford production begins in earnest in South Texas, providing housing - and quickly - in sparsely populated counties appears be the next way for the enterprising to profit off of the play.

And a ripple effect has created opportunity, in turn, to cash in by providing services for the new residents for everything from cleaning to catering or washing and folding laundry.

"Looking at this play, it's like, what is the next step?" asked landman John Pettit, who spent several years trading oil and gas leases in the play before launching a venture to develop an 80-acre tract called Rancho Agave near Carrizo Springs. Pettit is a partner in Signor Group, which offers RVs and several three-bedroom modular quarters for lease to oil field service companies and operators. The company also will tailor a development specifically to a company's needs.

So far, its various RV slots and buildings have leased easily at a price of $500 a month for RV slots and $130 a night for rooms in the temporary buildings. A geotechnical firm recently took everything Signor Group had for 4½ months.

On a recent weekday, Pettit's cell phone rang relentlessly as he fielded a constant series of calls from his partners, from people looking for housing, from someone looking for a landman to help with a negotiation. Signor Group also started a joint venture to lease generators because there's so much demand for electricity hookups that the local power company sometimes falls behind.

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This country could solve a lot of its current employment problems and overstocked housing problems if Obama and the Democrats would quit strangling the domestic production of oil and gas.

Republican candidates need to be able to make this case based on what is happening in South Texas and North Dakota where the drilling boom has created employment and spin off businesses. On federal land it would also create significant revenues to help lower the deficit.