Study shows ecomomic impact through 2022 for Eagle Ford Shale

Juan A. Navejar Jr.

The Eagle Ford Shale now ranks as the largest single oil and gas development in the world based on capital expenditures based on an Economic Impact study conducted by the Institute of Economic Development at The University of Texas at San Antonio.
The study was released in March 2013. Wood Mackenzie Ltd recently calculated that oil and gas companies will spend $28 billion in South Texas Eagle Ford play during 2013. In 2012, many infrastructure projects had commenced or completed construction, including multi-million dollar oil and gas operation centers, pipelines, terminals and processing plants. The Center for Community and Business Research (CCBR) estimated that close to $19 billion was spent on capital expenditures in 2012 in the 14-county area.
For the 14-producing counties the 2012 economic impact was estimated to be over $46 billion, supporting 86,000 jobs. For larger 20-county area, Eagle Ford Shale activity generated over $61 billion in economic impact and supported 116,000 jobs in 2012. Six adjacent counties that include Jim Wells and Nueces counties saw significant impact as well.
Due to increased oil and gas extraction activity, Jim Wells County has seen a total output of $67.65 million and a gross county product of $33.77 million. Activities related to Eagle Ford Shale have brought 230 full-time employment positions with a total payroll of $10.39 million to Jim Wells County.
The study goes on to say that based on some regressions measuring the impacts of sales from the 14-county area on Jim Wells County sales, and other regressions measuring the impacts on commuter workers from Jim Wells, it is clear that these impacts underestimate the observable effects of Eagle Ford in this county. It is estimated that the impacts could be between three to six times higher than those presented in the study.
Projected impacts for 2022 include oil and gas extraction, oil and gas drilling and completion, royalties, and lease payments. Based on moderate scenario, the total output for the 14-county area is $61.1 billion with a gross regional product of $32.9 billion. More than 89,900 jobs will be supported with a total payroll of over $4.6 billion. In 2022, government revenues will be increased to an estimated $1.8 million locally and over $1.9 billion at the state level including severance taxes close to $971 million.
In 2022, the industry of extracting oil and gas will still be much more dominate that any other. Of the top ten industries within the Eagle Ford Shale for 2022, the top three industries are directly associated with the oil and gas sector of the economy. Extraction of oil and natural gas (189,476), support activities for oil and gas operations (9,528), and drilling oil and gas wells (7,492) will employ thousands of workers. Maintenance and repair construction of nonresidential structures will employ 6,689 workers, some of which may be indirectly associated with the oil and gas industry. The fifth highest employment within the Eagle Ford Shale is not surprising. The food services and drinking industries will employ an estimated 4,607 workers in 2022. All together in 2022, the top ten employment industries within the Eagle Ford Shale will support an estimated 58,644 citizens of South Texas according to the study.
With the six indirectly affected counties that includes Jim Wells County, the 2022 projected estimates the total output of $89.4 billion. That is roughly $28 billion (46 percent) increase from the total estimate for the 14 county region alone. The gross regional product is $41.75 billion, 26.9 percent greater than the gross regional product when these six counties are not included. Cumulatively, the 20-cointies impacted by the Eagle Ford Shale will support 127,919 jobs, with a total payroll of just under $6.5 billion. Total revenue going towards the local governments within the area, for 2022 is $2.1 billion. The government will collect over $2.21 billion in estimated revenue.
For a complete copy of the study contact the Alice Chamber of Commerce at 361-664-3454.