• March 7, 2021

Local economy a mixed bag - Odessa American: Local News

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Local economy a mixed bag

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Posted: Sunday, November 1, 2020 5:00 am

Things in the Odessa economy are still moving, but at a slower pace due to the pandemic, the downturn in oil prices and general uncertainty about the election and the increase in COVID-19 cases.

Wesley Burnett, director of economic development at the Odessa Chamber of Commerce, said there has been quite a bit of interest from companies looking to move to the Permian Basin.

But there are many factors at play from the pandemic to education levels, oil prices and the Nov. 3 presidential election.

“Our workforce is ready for something, so I think they’ll be seeing some opportunity there. Consolidations are happening, but we do have interest from different companies looking at Odessa … surprisingly more than I thought we would have during this time,” Burnett said.

The unemployment rate for Odessa is currently 13.1 percent, Burnett said. He added that it has “kicked back up a point or so.”

“The layoffs are finally starting to kick in. The stimulus and all the unemployment benefits are running out. They’re filing and it’s showing up,” Burnett said.

The energy industry is the sector most impacted, he said, but the hotels and motels, although they aren’t in the same category, also are reeling. And then there is the uncertainty about the virus.

“We’re just in for a rough rest of this year at least, and probably the first part of next year. It’s going to depend on a vaccine and a lot of different things,” Burnett said.

Tracee Bentley is the president/CEO of the Permian Strategic Partnership, a coalition of 20 companies that came together to work in partnership with local elected officials and community organizations to advance regional transportation projects, improved schools, more affordable housing, quality health care and workforce training.

“Last year, we had an incredibly successful year. We put almost $34 million out in initiatives last year and we had every intention of matching that or doing more this year and then COVID and oil prices hit in the spring,” Bentley said. “But having said that, we were still very, very busy this year.”

In February, PSP launched a Basin-wide census campaign called The Permian Counts. She added that she was glad they had all their ducks in a row pre COVID-19 otherwise it would have been harder to organize.

“That was very extensive. We were up on TV and on the radio,” Bentley said. “We were doing a ton of digital. The deadline was ever changing ... Luckily, we had built a platform that could be flexible and so we just kept on going until ... the date was called. We put a lot of time and effort into making sure that people understood the importance of the census, especially right now. In February, none of this had quite hit yet so we had a different campaign in mind. We had a lot of face-to-face events planned and some knocking on doors of our own. Then when COVID hit, we almost completely switched to digital out of necessity, so I’m glad that we had the flexibility and we were able to make such a pivotal shift, so we’ll see. Obviously, we don’t have numbers back yet but our fingers are crossed that our reporting comes back at least in the 60 to 70 percent (range). That would be great.”

Broadband and connectivity are items that PSP had been thinking about in terms of telehealth at first, especially in rural communities where it was sometimes people’s only option.

“We’d been thinking about it for a while and then COVID hit and it really highlighted just how absolutely essential that is to education. That’s when we said OK we’ve got to move this up our priority list because we are now seeing in a very stark way that without connectivity kids are going to miss entire grade years …,” Bentley said.

PSP started within the oil and gas industry. Historically, companies had built their own infrastructure because production tends to take place out in the middle of nowhere.

“We said, well wait a minute if my 20 companies are doing that surely there’s a way to utilize that as a springboard and start to connect pieces around us … That’s kind of where our mind went, so we started contacting the major carriers saying hey we know that if you look at a map people don’t want to spend a lot of time here because we don’t have the population that the east side of the state does, but what we do have is an industry that 100 percent relies on connectivity so work with us to broaden it out to the community,” Bentley said.

“That’s how we got in touch with SpaceX and Secretary (Don) Evans, (chair of PSP), spoke to their CEO and explained our situation and said, hey listen, I know we’re in a downturn, certainly, but it’s going to come back and you should work with us to utilize this time to start to get some infrastructure …,” Bentley said.

From there, PSP along with other partners worked with SpaceX to establish a pilot project to provide satellite internet to a limited number of ECISD families in Pleasant Farms.

Companies in PSP have made 30 to 50-year monetary commitments to the Permian Basin.

“This downturn hasn’t really made them question that; it’s just delayed things for a bit. As we like to tell people, when, not if but when COVID starts to get figured out and prices start to go up a little bit, when people start to travel the Permian Basin is going to be the first Basin in the world that we start to see heavy production again. … We’re really hoping that it’s in the next year or so. We do think that’s very heavily dependent on finding a vaccine for COVID,” Bentley said.

Asked about oil companies tending to move in and out of the Permian Basin when they get what they need, Bentley said the commitments PSP has gotten from its companies are the strongest long-term commitments she’s seen.

“… And like I said, we had to slow down quite a bit because of it, but the commitment to what PSP is doing to this community has not waivered one tiny bit,” she added.

She said there are some exciting projects to come.

Bentley anticipates several new PSP initiatives will be announced before the end of the year, but wouldn’t give anything away.

“It’s also an indication that not even when times get tough PSP is not going to fold up,” she said. “We’re hanging in there just like the rest of our fellow community members and we’ll buckle down and get it done no matter what it takes.”

Asked about the culture of educational attainment in Ector County, school Superintendent Scott Muri said although people may think they don’t have to go to school and can just work in the oilfield many jobs in the oilfield may not require a four-year degree but they do require some type of technical certification or vocational credential.

“The vast majority of jobs require some form of post-secondary credential. Again, that doesn’t mean four years. It’s four, two, technical or military, but it’s something and we’ve got to get our kids prepared for those things. In our state right now, the data say that 70 percent of jobs in Texas require something. In our district, 6.5 percent of our kids have it. That’s just unacceptable. Our jobless rate is partly because our folks are not educated,” Muri said. “They don’t have the credentials that they need to be successful. Why is that here? Why does Ector County have the highest unemployment rate right now? Is it because our populace needs academic experience that is different from what they may have had in the past. We’ve got to provide it. That’s why we’re here. That’s why ECISD exists … to prepare them for whatever future they may want.”

Economist Ray Perryman said in a recent column for the Odessa American that the correlation between education level and employment is well established.

“Not only do those with more education typically earn greater incomes, they are also less likely to be unemployed. The pandemic has caused this pattern to accelerate,” Perryman wrote.

“Remote work had been growing before COVID-19, but its prevalence has increased dramatically. More people are working at home, with companies planning to maintain this posture for now. However, workers with less education tend to be in jobs for which this approach is not feasible; rather than shifting to remote work, they have become unemployed.

“Given the types of jobs and industries which lend themselves to remote work, it’s not surprising that higher levels of education have meant a greater likelihood of working from home. Recent surveys by the Bureau of Labor Statistics indicate that about 70 percent of people with a bachelor’s degree and higher are in jobs suitable to perform remotely, compared to just 25-30 percent of those with only a high school diploma,” he stated.

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