July 5, 2014

Atop a vast field of wealth in South Texas, some barely scrape by

Poverty persists in colonias amid the riches of the Eagle Ford Shale.

From the window of her tin-roofed trailer, Judy Vargas can glimpse a miraculous world. It is as close as the dust kicked up by the trucks barreling by but seems as distant as Mars.

As you walk out of her front yard — where the chewed-off leg of an animal, probably a feral hog caught by a prowling bobcat, rots outside — a towering natural gas flare peeks over the southerly view.

Across the railroad tracks and Interstate 35, a newly reopened railroad interchange stores acres of pipe and receives shipments of sand from Wisconsin to be used in hydraulic fracturing, or fracking. Next to the terminal is an expanding gas-processing plant that lies in the heart of the Eagle Ford Shale, a giant field that in La Salle County alone produces more than $15 million worth of oil a day, or about one of every 55 barrels produced in the U.S.

This rural patch of thick mesquite in the brush country south of San Antonio had been known for something else. Five miles from here is Cotulla, where Lyndon B. Johnson at age 20 saw hardship so searing that it helped inspire his war on poverty.

Now, it is the scene of one of the greatest oil booms the country has ever seen. But poverty endures in makeshift, barely governed communities called colonias, such as the one where Vargas shares her trailer with an ever-shifting assemblage of relatives.

Decades after Johnson took a teaching job here in 1928, the area, like the country, is a startling and incongruous mix of cascading wealth and crushing hardship. And though the boom has helped produce fortunes for some and comfortable lives for many, for others it exists within a rural landscape of unpaved streets without garbage pickup, where few dare to drink the tap water because it tastes and smells like chlorine.

Early one evening in May, Vargas, 28, cooked spaghetti for her three children and her grandmother. The high school dropout had just arrived home from her job as a restaurant cook. She and her grandmother, who works as a maid at a motel, make a total of roughly $1,500 a month, far below the federal poverty level of $2,325 for a family of five.

Above their dining table was a portrait of the Last Supper and, tucked in a corner of the frame, a picture of Vargas’ uncle, unsmiling in a white uniform and one of at least three incarcerated relatives. The family ate and swatted at flies as trucks roared by.

This is a different kind of poverty than in 1928, this time surrounded by a buzz of industrial activity, not empty stretches of scrub grass. But it feels as entrenched as ever, reinforced by bad luck, bad choices, a lack of education, and the isolation that allows the poor to remain invisible and adrift in lonely, distant orbits.

“It feels the same to us,” Vargas said of life amid the oil frenzy. “The money that they have, we didn’t have it before. And we don’t have it now.”

‘Not a rising tide’

At least partly because of the oil economy, Gardendale is one of the better-off colonias. The Federal Reserve Bank of Dallas found in a report to be released this year that 42 percent of the population of colonias in six Texas border counties — not including La Salle — lived below the poverty line, compared with 14.3 percent nationally.

The median annual household income was $29,000. In La Salle County, other studies have shown, 39 percent of children live in poverty.

The boom has both given and taken away. School officials bought 1,300 iPads, one for every student in the district. And there are jobs — well-paying in the oil fields for some, marginal in fast-food joints and cheap motels for others.

But oil and gas have brought a new set of problems, including environmental concerns. During the peak ozone season in 2012, Eagle Ford operations in La Salle County emitted 12.8 tons of nitrogen oxides daily and 28 tons of volatile organic compounds — pollutants that produce smog and can cause health problems, according to a report from the Alamo Area Council of Governments.

La Salle County has had 11 motor vehicle fatalities this year, up from two in 2007. Officials partly blame a population boom and increased traffic from oil and gas activity.

Rent has skyrocketed. Newly hired teachers had such a hard time finding affordable housing that the Cotulla school district opened its own trailer park for them.

Texas has reaped tremendous benefits from oil and gas. But the poor in the colonias seldom own the leasing rights for the natural resources that lie under the ground they live on.

One-third of Texas’ $48 billion in tax revenue last year came directly or indirectly from the oil and gas industry, said Bernard Weinstein of the Maguire Energy Institute at Southern Methodist University.

Part of the revenue goes to the state’s general fund, as well as its so-called rainy-day fund. But little of it is spent on social services and programs to help the poor, although some helps to finance public schools and universities.

So despite the boom, Texas has some of the highest poverty rates in the nation and ranks first in the percentage of residents without health insurance.

Republican leaders have supported tapping the rainy-day fund for one-time investments in water and transportation infrastructure, but they have blocked attempts to use the fund for education and other services, arguing that it was designed to cover emergencies and not recurring expenses.

“Despite the bounty of the Eagle Ford, which is considerable and on the whole clearly positive, it is not a rising tide that lifts all boats,” said Ray Perryman, a leading Texas economist and author based in Waco.

He noted that Texas has long had a philosophy of limited government and an aversion to spending on social services, an attitude intensified by the current political environment.

“Texas is not a good place to be poor, and there is little political appetite for change,” he said.

Poverty persists

Officials, oil executives and economists disagree over why poverty persists amid the boom.

La Salle County’s top elected official, County Judge Joel Rodriguez Jr., said the boost in property and sales tax revenue from Eagle Ford activities has been offset by increases in county spending on road repairs, law enforcement, fire safety and administrative functions.

He criticized the support provided to the poor by the oil and gas industry.

“The oil companies come by for Thanksgiving with turkeys, or they may have a function to have pictures taken to show the world they are socially responsible, and then you’ll never see them again,” Rodriguez said.

But Rodriguez and others were skeptical of those who were unemployed in a region teeming with jobs and new businesses.

“The fact is we are handing out big checks to people, and we are still short on people who want to work,” said Chris Faulkner, chief executive of Breitling Energy, an oil company that operates in La Salle County.

Late last year, Judy Vargas’ grandmother, Ernestina Salinas, returned from working the fields in Minnesota to find that squatters and scrap metal thieves had broken into the trailer. They stripped the trailer’s electrical wiring, stole the water heater, and left behind food and dirty dishes.

Vargas, who has lived in the trailer off and on since she was 10 or 11, returned to Gardendale from Dallas with her children and her husband, worried about Salinas’ safety.

Life, it seems, is lived one step ahead of disaster. One day, sheriff’s deputies came to the trailer after a dispute that began when the girlfriend of Vargas’ cousin left a 10-month-old baby beside the road in front of the trailer.

Some days, Vargas appreciates the colonia’s quirky isolation. Other times, in a trailer held up on the dirt by concrete slabs, next to the pile of ashes where garbage is burned because no one picks it up, ordinary life seems extraordinarily hard.

By June, the temperature was already above 100 as she drove through town. She rolled down all four windows — the air conditioner was broken — and the dust from the 18-wheelers filled the car like cigarette smoke, coating the Bible she kept inside.

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