New Mexico oil country struggles as cities boom

Published on NewsOK Modified: May 7, 2014 at 1:03 pm •  Published: May 7, 2014
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CARLSBAD, N.M. (AP) — The oil field trucks and big rigs rumble through morning and night, creating a first-ever rush hour in this otherwise sleepy 1960s-era tourist and mining town. Hotel rooms along the clogged two-lane highway are mostly booked, some of them fetching nightly rates that rival those in Manhattan.

Businesses desperate for workers will hire anyone who can pass a drug test, locals say. Finding a house, however, is another issue. So is getting a hamburger at the local McDonald's, where crowds make a meal a drawn-out ordeal.

Carlsbad is centered in one of the most productive regions of the oil-rich Permian Basin, which is concentrated in Texas and stretches into New Mexico. The basin has long been a robust oil corridor, but the discovery of rich fields in southeastern New Mexico and advances in drilling technology have transformed once-quiet cities like Carlsbad into boom towns.

As a result, the city of 26,000 people is struggling to keep up with its fast-growing population and the accompanying challenges, from housing shortages, higher crime rates and a spike in deadly accidents between big rigs and cars on narrow country roads. It's one of the few areas of New Mexico experiencing an economic boom.

"We just can't keep up," Carlsbad Mayor Dale Janway said.

The upswing mirrors those in North Dakota and Montana where the discovery of oil turned towns into thriving cities virtually overnight, creating similar issues of crime, road safety and lack of housing.

Despite the growing pains of New Mexico's boom, the oil industry points to the economic benefits it can bring in the form of jobs, business development and taxes. An industry trade group says it's worked with governments to solve problems like housing.

With more workers pouring into the state, crime has been rising. Last month, police say an oil worker from Texas admitted killing his visiting girlfriend after an argument in a local bar.

But officials here and in the nearby city of Hobbs say the biggest challenge is keeping up with housing demand and other infrastructure needs.

Lexi Allen of Hobbs said she and her family got a letter ordering them to move from the mobile home they rented for seven years after an oil company offered her landlord $2,000 a month to house its workers. Allen was paying $1,300 monthly.

"They didn't even have the courtesy to talk to us," Allen said. "It said we were offered more money by the oil company ... so you have to be out in 30 days."

New apartment complexes have waiting lists as soon as construction starts. RV parks are overflowing with oil workers and families, who have given up on finding anything else affordable. And roadside hotel brands like the Hampton Inn and Holiday Inn Express are charging as much as $300 a night.

"We have a new society out there that's called an RV society," Hobbs real estate broker Bobby Shaw said.

The problem is that the oil industry has the unique ability to expand almost overnight, Hobbs Mayor Sam Cobb said.

"You can stand up a drilling rig in two days. Twenty-five jobs are created that quickly," said Cobb, whose town has been struggling for years to build enough houses and hotels to catch up.

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