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Eagle Ford booms bigger, faster than first thought

 

Eagle Ford booms bigger, faster than first thought

 

 

Christopher Sherman

Associated Press

 

McALLEN – The oil and gas rush in South Texas’ Eagle Ford Shale region is supporting 116,000 jobs, many in counties that just five years ago were fighting population loss, according to a university study released March 26.

The University of Texas at San Antonio’s Institute for Economic Development presented its second annual report on the Eagle Ford Shale’s economic impact to legislators in Austin.

In 2011, the same study found that the oil and gas drilled from the belt of South Texas ranchlands that make up the Eagle Ford supported about 48,000 jobs in oil and gas, drilling, support operations, pipeline construction, refineries and petrochemicals. The economic impact from one year to the next similarly increased to $61 billion last year from $25 billion the year before in the 20 counties studied.

“I didn’t expect to see the ramp-up so quickly in terms of the actual jobs in 2012 versus 2011,” said the study’s lead investigator, Thomas Tunstall, director of the UTSA Center for Business and Community Research. “We knew a lot of these things were on the way and would start to make an impact, but I frankly thought it would be more gradual just because I thought it would take longer to get things in place.”

But when the production data are considered, it’s clear that the workforce must have grown dramatically.

The oil production from 2011 to 2012 nearly tripled, from 126,000 barrels per day to 352,000 barrels per day, Tunstall said. And nearly 3,000 new wells were drilled last year in the energy-rich shale band that stretches northeast from Laredo.

The study was funded by America’s Natural Gas Alliance, a trade group representing natural gas and exploration companies.

The activity has been a boon for rural counties that have experienced the boom and bust cycle in the past, but also for metropolitan areas such as San Antonio and Corpus Christi along the periphery. The larger cities have been bases of oil and gas field operations and processing.

The 2011 study showed much of what was coming, and 2012 confirmed that much of what was expected was happening. The pipeline infrastructure to handle the new wells continues to grow, as do processing and refining facilities.

Small South Texas towns were suddenly awash in budget surpluses, but were also facing increased demands for improved infrastructure that was being stressed by the explosive growth.

Researchers found that local governments received more than $1 billion in total revenue from the oil-and-gas-related business in 2012, while the state collected $1.2 billion.

Tunstall said he advises those communities to think about the medium and long term when making decisions on how to use the money. The university has started offering workshops to staff members in smaller communities that may not have the experience or personnel to keep up with the demands of such rapid growth. They cover topics such as land use, infrastructure and leadership, and they’ve received a strong response.

Communities should consider “that the decisions that they make now will determine what their communities will look like in 10 years in terms of infrastructure,” Tunstall said.

He added that it’s “also aesthetics, making sure their communities are livable and attractive and that they’re looking for ways to diversify so that they’re not solely dependent on oil and gas and related activities for jobs and economic growth.”

Last year’s dizzying growth rate is expected to level off in coming years, reaching $89 billion of economic impact and supporting 127,000 jobs in 2022, according to the study. But Tunstall warns that projections that far out are always vulnerable to changes in the commodities markets.

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