Karnes City goes from poor to prosperous with Eagle Ford shale play

Houston Chronicle:

After more than three decades of running City Pharmacy on slowly decaying Main Street, Paul Bordovsky retired in 1995 to raise his Charolais cattle on 640 acres of rolling grassland a few miles east of town.

One day in early 2008, after hauling a couple of young bulls to a sale in Cuero, he called his wife, Emily.

"I said, 'I've got some real good news. I got $3,000 or $4,000 for those bulls,' " he recalled.

"And she said, 'I've got better news for you. Conoco has called twice already. They're coming out here to stake a well.' "

Little could the Bordovskys or anyone else in Karnes County have grasped the implications of Conoco-Phillips' secretive decision to drill a deep, expensive well into the mysterious formation known as the Eagle Ford Shale.

Over the decades, other energy leases on their land on FM 81 had come up dry. The thought of someone tapping a mother lode under that pasture was exciting, even if expectations were low.

"I had no reason to think this would be any different. I'm not that big a dreamer," Bordovsky said.

But this was very different. The boom that followed Conoco-Phillips' strike upended sleepy Karnes County. Thousands of workers have poured in, an untold number of ranchers became multimillionaires, main streets boast new businesses and hard work routinely begets six-figure salaries.

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"They told us it would be a very tight hole. Don't ask any questions," Bordovsky recalled.

But the so-called discovery well for the Eagle Ford Shale in Karnes County proved to be a good producer, generating both gas and more than 130,000 barrels of condensate, with the Bordovskys soon cashing big checks.

It also brought rapid change to the rural landscape, as Bordovsky's roadside pasture on FM 81 is now jammed with construction workers, heavy equipment, huge storage tanks and complex piping.

A constant stream of tank trucks now delivers freshly pumped crude to new transfer stations operated here by Koch Pipeline and Conoco-Phillips on land bought from Bordovsky.

New pipelines cross his ranch, leaving lanes of bright green grass. Two more wells will soon be drilled on the backside, near the creek, and Bordovsky is also selling more roadside acreage to energy companies.

And, like most others here, he considers the trade-off well worth it.

"It's been good to me. I miss that pasture, but I could have ranched here for 300 years and not have the income we do now," he said. "Anyone who owns property should be benefiting."

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Deposits at the Karnes County National bank have doubled in three years. The county's tax base has increased from $562 million to $3.1 billion in two years. The value of some prime commercial real estate has jumped tenfold.

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For the first time in decades, there are well-paying jobs for almost anyone who wants to work and can pass a drug test. Hiring signs are every­where. A remark often heard is that there are no unemployed people left in Karnes County, only the unemployable.

"A $20-an-hour job was once unheard-of in this county. The part that is most exciting is that if a person wants a job, they can get one and you can work as many hours as you want. This is the American Dream personified," said Herb Hancock, 71, the newly elected county attorney.

"A kid can leave a $40,000 overtime job at the prison and make over $100,000 in the oil field. You've got kids coming home to work here who haven't lived here in a long time," he said.

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There is much more.
There are going to be more jobs as the county has to rebuild roads that have deteriorated under the heavy loads of the big rigs working the wells and bringing in pipe.   They will also have to deal with other things that go with a growing population.  But those are all good problems.  Karnes City is unlikely to ever be Dubai, but the growth there is having an impact in Texas cities from San Antonio, Corpus Christi and Houston.