It might surprise most of us to learn that there are over 250 ghost towns in Texas. In fact, many communities in South Texas that are now being impacted by the Eagle Ford Shale probably had some concerns about becoming the next ghost town. That is, until unconventional oil and gas exploration techniques changed the landscape entirely. However, as residents of Texas know probably better than anyone else, booms will sooner or later lead to slowdowns, if not outright busts.

This sort of begs the question: Why do communities become ghost towns in the first place? To gain some insight into the issue, UTSA’s Institute for Economic Development examined the cases of Texas communities over the past two centuries that have fallen victim to significant population declines. Interestingly, there is no single factor as to why communities end up as ghost towns. In some instances – clearly applicable to the Eagle Ford Shale – natural resource abundance is the culprit. Typically, the supply of oil, gas, coal or other mining product runs out. In other cases, the commodity being mined falls victim to a steep and extended price decline. The Permian Basin area in West Texas, for example, has seen ups and downs related to the price of crude oil for decades. In other communities, the transition of locomotives from steam to diesel resulted in a drop in demand for coal mined in Texas.

But a fall-off in natural resource mining/extraction is not the only reason that communities become ghost towns. The mechanization of agriculture during the 20th century resulted in a decrease in rural populations, which in turn caused many small towns to systematically wither away. New railroads or highways that bypassed existing cities often served as a death knell.  In other cases, relocation of the county seat served as a catalyst for population migration away from established city centers. Sometimes the need for military bases ceased to exist, and the local communities followed suit. Drought and flood have been factors from time to time.

In the academic economic development literature, there has been a fair amount of research performed on the Resource Curse or Dutch Disease, which has demonstrated that in many situations, communities with an abundance of natural resources actually end up worse off after the discovery. This might be because competing industries are “crowded out” by the emphasis on natural resource production. In other instances, the temporary windfalls are squandered by local governments and citizens.

But the effects of the resource curse are not uniform and clearly vary by country or community – many do in fact end up better off. A key differentiating factor between those that are successful and those that are not appears to be governance. Several programs at UTSA’s Institute for Economic Development such as the Rural Business Program and the Eagle Ford Shale Community Development Program – in coordination with the College of Public Policy, and the Center for Urban and Regional Planning – have been working to promote just that. Good governance is the key to the long term prosperity of the Eagle Ford Shale communities.

UTSA Is Working To Assist Communities In South Texas

[ic-l]Along those lines, UTSA, with a grant from Royal Dutch Shell has developed a municipal capacity building program aimed at assisting community leaders address the many issues they currently face. In addition, the Institute for Economic Development continues to stress the need for diversification in communities across South Texas. Houston in the late 1970s, for example, was nearly 90% dependent on the energy industry for economic activity, but has since made significant efforts to diversify into other areas such as medical, finance and technology so that it is less dependent on a single economic sector.

For the rural communities in South Texas, the options are more limited. The relatively short list of industries with potential for growth include olives and olive oil processing, spinach and other agricultural products, geothermal energy, tourism, hunting, outdoor recreation, water recycling/desalination, and wine/beer making. In addition, if a robust broadband infrastructure can be put in place, there are prospects for telemedicine, distance learning, and attracting knowledge workers who prefer the lifestyle associated with smaller communities.

But these potential opportunities cannot be actively pursued yet – they can only be planned at this point. UTSA’s Eagle Ford Shale Community Development Program refers to this approach as “strategically sequenced” economic development. Clearly local mayors, city managers, economic development directors, county judges and commissioners, and other community leaders have their hands full with the pressing needs of infrastructure development right now. That list is long and includes roads, water, wastewater treatment, solid waste treatment, medical facilities, first responders (police, fire, medical emergency), electricity generation, K-12 education, and housing – as well as broadband, improved public amenities and aesthetics that will be needed to improve quality of life. And yet, if the infrastructure in South Texas is incrementally and steadily improved, it can serve as the foundation for attracting other types of industry in future years.

The Eagle Ford Shale discovery represents a significant opportunity for South Texas. But it is important to stress that long term community sustainability is not guaranteed. The extensive roster of old Texas ghost towns is proof enough of that. So it will be important for community leaders to engage in longer term strategy planning, undertake regional approaches to economic development, establish a skilled local workforce, recruit or nurture strong institutional management, and exercise fiscal discipline. If we can put these pieces together, we will have gone a long way toward ensuring that economic development – which includes job growth, quality of life, and environmental stewardship – will be sustainable for communities across South Texas well into the 21st century and beyond.