With due respect to Mark Twain’s adage to the contrary, the statistics don’t lie. The Eagle Ford Shale, a 20-county oil and gas play in South Texas, contributed $25 billion in total economic output to the South Texas region in 2011 and was responsible for almost 47,100 full-time jobs.
The Center for Community and Business Research at the University of Texas at San Antonio (UTSA)’s Institute for Economic Development released a report last week that seems to liken the Eagle Ford Shale region, once a sleepy economic backwater of ranches and scrubland, to Spindletop (the Southeast Texas oil boom which helped create the modern oil industry).
An earlier UTSA study estimated that the Eagle Ford would account directly and indirectly for almost $21.5 billion in economic output by 2020 and create 68,000 fulltime jobs. The most recent report shows that Eagle Ford eclipsed that revenue impact in a single year. The new study now estimates that the shale play will generate 117,000 jobs by 2021.
The latest UTSA study reports that $3.1 billion in salaries and benefits was paid to workers in 2011 in the 20-county region, and that activity in the shale industry amounted to $12.63 billion in gross regional product. As a result, that year $257 million went into the coffers of local governments and $358 million to the State of Texas.
A slew of major oil and gas companies are already active in the play, including Anadarko Petroleum, BHP Billiton, Chesapeake Energy, and EOG Resources. Even though low gas prices and oversupply have forced natural gas developers to back off on production elsewhere, the Eagle Ford shale’s rich mix of gas and natural gas liquids (primarily ethane, a higher-priced commodity greatly in demand by petrochemical companies for the production of ethylene) makes Eagle Ford an attractive play, with at least 30 years of productive life ahead of it.
OK, so Eagle Ford may not be Spindletop, but with increased employment, higher wages, and a sharp rise in tax collections for local governments and the State government for years to come, the Eagle Ford Play is certainly a major economic boom, and a real boon to the region.
Photo by JD Lamb, used under a Creative Commons license.