New oil boom all about economics

Published 8:00 pm Sunday, June 17, 2012

I was only 4 years old when my family moved to Brookhaven back in the ’50s. We lived in a local motel for a few months waiting to buy a house – housing was hard to find in those days. The reason was the oil boom that had hit the area a few years earlier. Years later, I recall stories of what were called sleeping beds, where oil field workers could rent beds for eight-hour periods.

     The term “sleeping bed” popped in my mind after inquiry from a friend about his idea of creating “man caves” in a 100,000-square-foot vacant warehouse in the area. His idea is to subdivide the old manufacturing facility with a more modern version of the old sleeping bed idea. This new sleeping bed, he said with a twinkle in his eye, would have flat-screen TVs, the latest in computer and video games, high-speed Internet connections and well-appointed furnishings.

     We laughed, but there was a certain amount of sincerity in his brainstorming. Word is starting to leak out of the potential of another, even bigger oil boom in the Amite and Wilkinson County areas of Southwest Mississippi, including several parishes in Louisiana.

     It is called the Tuscaloosa Marine Shale project. Initial estimates predict some 7 billion barrels of sweet crude and natural gas are lying 15,000 feet below the surface.

     The oil find is not recent, as geologists have known about the formation for years, dating back to the old Brookhaven and Mallalieu Field days of the 1950s and 1960s.

     What’s new is the technology that allows the oil to be recovered. Using horizontal drilling and a process called “fracking,” the shale rock located 15,000 feet below the surface is broken up so the oil reserves can pool and be brought to the surface.

     As was explained at a meeting at Percy Quin State Park this past week, the economic impact on the area could be huge – life-changing was a phrase used where thousands of workers in oil and related industries swarm into the area. Such is the reason for my friend’s idea about his man cave.

     In the past few years, there have been overnight boomtowns in Oklahoma, North Dakota and Texas. Each has been created as oil companies use new technology to recover oil that before was not recoverable. Sleepy rural towns once thought to be dead and dying were suddenly brought back to life. But, suddenly coming back to life does not come without problems, and thus one of the purposes of the meeting at Percy Quin.

     Area leaders want residents to understand that while an oil boom might bring wealth, it too will bring problems – from roads and bridges to handle the vehicle traffic to accommodations for housing and entertaining the influx of workers.

     Boomtowns also bring opportunities for local residents – both for the landowners who might receive oil royalties to business owners who need workers to provide services. Health care providers have to be prepared for the influx as do school administrators. Even law enforcement must be prepared.

     Environmental concerns also must be considered. The fracking process requires the use of large volumes of water, an issue of which we all must be concerned. Gone are the days when someone drills a hole, pulls out the oil and leaves town for the rest of us to figure out what to do with the waste and residue left behind. One only has to look back two years ago and remember the BP oil spill in the Gulf of Mexico. That impact will be felt both environmentally and economically for years to come.

     With good comes bad, but proper planning with good managing solves many issues.

     Before anyone starts counting their chickens before the eggs are hatched, however, there are some variables that could make the whole thing go bust. The project is price sensitive to world economic conditions – a 10-dollar drop in oil prices could put the project on hold. Further testing is needed to be sure the field will produce as expected and for as long as expected.

     It’s all about economics – if the oil companies can make money they will drill; if they cannot, they will not.

     As the meeting came to an end Thursday, a small woman stood up to make a comment. She had asked questions earlier that some felt naïve; groans could be heard when she started speaking.

     She praised the group for starting the meeting with prayer and only as one’s mother can do, she reminded everyone who put the oil there in the first place. “He wants us to use it and enjoy it,” she said. “But only He will let us have it, when He wants us to have it.” There was nothing but silence when she sat down.

     Write to Bill Jacobs at P.O. Box 551, Brookhaven MS 39602, or send e-mail to