Is San Angelo About to Experience Another Economic Boom?

SAN ANGELO, TX – Oil and gas drilling and production in the Permian Basin are driving the demand for oilfield related jobs in the Concho Valley. 

West Texas Intermediate Crude remains steady at just under $50 per barrel and that has strained electric transmission infrastructure in West Texas.  San Angelo Chamber of Commerce Vice President for Economic Development Michael Looney on Monday reported that Concho Valley Workforce Solutions has postings for over 300 oilfield related jobs. 

The report shows San Angelo’s unemployment rate is 4.2 percent for 2017 down from 4.8 percent last year at the same time.  Looney said, “Basically everyone who can work is working.” 

This month there are 379 active rigs in the Permian Basin; one year ago there were only 144.  That’s a 163 percent increase in drilling activity. 

American Electric Power Service Corporation is investing in major new infrastructure.  AEP Texas Manager for External Affairs Fred Hernandez said, “AEP is going to invest $1 billion per year for three years in infrastructure development, much of that in West Texas.” AEPSC and AEP Texas are separate entities. 

At the same time, ERCOT, the Electric Reliability Council of Texas announced three weeks ago approval of transmission line projects in West Texas.  ERCOT Senior Manager of Transmission Planning Jeff Billo said, “Based on projected load growth in this area, these new lines will be needed to support system reliability in the coming years.” 

The project will include a new, 345-kV transmission line that will connect the Odessa and Riverton substations.  It will span approximately 101 miles across Ector, Winkler, Loving and Reeves counties. 

A second new, 345-kV line will be located in Pecos County spanning about 68 miles connecting the Bakersfield and Solstice substations.  The estimated cost for the project is $336 million over the next four years. 

Many of the workers on those transmission lines west of San Angelo are staying in local hotels. Occupancy rates have risen about nine percent in June 2017 over the same month last year, from 53.4 percent to 62.5 percent.

The San Angelo Chamber of Commerce’s Business Barometer for August shows tremendous growth in commercial building permit values for the first half of 2017.  Shannon Medical Center has $45 million in permits issued.  The new H-E-B has two permits, one for the building at $16.5 million and one for the gas station at $1 million. 

Warren Cat is currently constructing a building with a 12 acre footprint in the San Angelo Business and Industrial Park on Loop 306 at FM 388.  The facility permit lists the project at $6 million.  And Kirby Park Villas has a $5.8 million permit or subsidized housing on 29^th Street at MLK. With six more months left in the current year, the number of commercial and residential building permits has exceeded last year's total. There were 3,723 permits issued through June 2017, compared to 3,563 for all of 2016, according to San Angelo Chamber of Commerce data.

Looney said this upswing in oilfield related activity is different from the boom of 2014, “This boom is a lot more tempered.  The price of oil has stayed steady between $40 and $50 per barrel for a year and a half.” 

Looney says many of the technicians and drivers who left the oilfield are not going back this time creating demand for trained or trainable workers.  The civilian labor force in San Angelo in June was 54,276 with 52,010 employed and 2,266 unemployed.

Sales tax collections at the City of San Angelo turned dramatically upward in May, increasing 13.5 percent over May 2015. Sales tax collections are only slightly up by 2.56 percent for the year.

Download the San Angelo Chamber of Commerce's economic barometer (one page *pdf) here.