The Eagle Ford shale in 2011 generated $25 billion in economic output and supported 47,000 full-time jobs in a 20-county area in South Texas, according to researchers at the University of Texas at San Antonio.
In 2011, oil production in the Eagle Ford increased six-fold, gas output doubled and condensate production tripled, according to Dr. Thomas Tunstall, the director of the university’s Center for Community & Business Research and a co-author of an 88-page report titled “Economic Impact of the Eagle Ford Shale.”
The May 9 report by all accounts is the most complete measuring stick of the play’s production. In short, it paints the Eagle Ford as one of the biggest drivers of new growth in Texas.
“Gas production has grown to 271 billion cubic feet, and oil production has literally gone off the charts. Last year, 28 million barrels were produced from a base that produced about 4.3 million barrels the previous year,” Tunstall said.
“The production of condensate, which is priced similarly to oil and also measured in barrels, has increased dramatically as well. Taken together, production for oil and condensate in 2011 was almost 50 million barrels, and we expect to see that probably double for 2012.”
According to the study, a 14-county area of the Eagle Ford in 2011 produced about $20 billion in total economic output and supported 38,000 full-time jobs. Average annual salaries in the 14 counties have increased from $23,000 to $28,000 in 2005 to $31,000 to $36,000 in 2011.
“A lot of these counties have traditionally been some of the poorer counties in Texas. We’ve estimated that $2.6 billion in salaries and benefits were paid to workers [in 2011], and obviously there has been an increase of sales tax and local government revenues,” Tunstall said.
“The nice thing about the Eagle Ford -- unlike the Haynesville, Barnett or Marcellus, which are primarily dry gas -- is that it has oil, gas and condensate. With oil prices hovering around $100 per barrel, that’s one of the reasons the Eagle Ford remains active,” he added.
Looking at a larger 20-county area, which includes the more populous Bexar County, the home of San Antonio, the Eagle Ford’s impact is even greater, according to Tunstall. Along with the $25 billion total economic output and 47,000 full-time jobs, he cited $3.1 billion in salaries and benefits generated by the play last year.
“A good leading indicator of the activity that is going on in the Eagle Ford is the number of drilling permits. In the 3,800 or so permits that were issued in 2011, it resulted in more than 1,600 new wells being completed,” he said. “We expect to see 2,500 new wells per year for the foreseeable future. Having said that, it’s possible that these numbers can go higher, and I have seen forecasts that suggest 3,000 wells or even more could be drilled annually.”
Shortly before Tunstall’s presentation, Curt Anastasio, chief executive of NuStar Energy LP, spoke to the Alamo City crowd.
“I really can’t emphasize enough the significant impact the Eagle Ford play is having, and will continue to have, on our company. NuStar has the benefit of owning numerous crude oil and product pipelines and storage facilities within the Eagle Ford region. We’ve already completed some pipeline projects that are already flowing Eagle Ford crude oil, and we’re undertaking many more pipeline and storage expansion projects in this region,” he said.
“We’re redeploying, or repurposing, existing pipelines that had previously been idle or at spare capacity because they were underutilized, and we are building new pipeline and storage facilities in the Eagle Ford region as fast as we possibly can,” he continued. “But even with that we’re just scratching the surface. We’re currently developing and negotiating some amazing new opportunities, not just in the Eagle Ford but in the other oil and gas shale developments that have sprung up in the United States. We’re also evaluating a series of projects that could double our company’s earnings during the next few years.”
Joe Straus, Speaker of the Texas House of Representatives, emphasized what the study’s results mean for his state. “We now have a clear picture of what exploration in the Eagle Ford will mean: thousands of jobs, hundreds of millions of dollars in tax revenue and billions of dollars in total economic output.”
The Eagle Ford “has had a transformative impact” on the 20-county region, Straus said. Local retail establishments and landowners have benefitted, and “some property-poor school districts have turned into property-rich school districts.
“During the next 10 years, the Eagle Ford will continue to drive economic activity in South Texas, creating about 117,000 jobs and more than $1 billion of revenue for our state,” he said. “Energy exploration at home ultimately means less reliance on foreign sources of energy. It is my hope that we will tap the full potential of this amazing resource for decades to come.”
Julian Castro, the mayor of San Antonio, offered a bold prediction about the Eagle Ford’s impact on the city.
“As the United States moves toward energy independence, San Antonio seeks to become, and can become, the new energy city of our nation,” he said with enough bluster to make someone from Houston, the country’s reigning energy capital, blush.
“I say that because of the great Eagle Ford shale investment and the thousands of jobs we are already seeing. I say that because of the smart investments that CPS Energy and others are making in renewables. When you take that combination of natural gas investment and a strong investment in renewables, both of those markets get stronger and stronger and San Antonio’s place in the energy economy of the nation and the world also get stronger.”
But Castro’s fanfare wasn’t done.
“I believe that we can be the city that owns the new energy economy -- the new energy city of the 21st century. We’re going to accomplish that in three ways: invest in our universities; ensure that our businesses have the ability to prosper by making it easy to do business in South Texas and San Antonio; and ensure that the public sector is a good partner.”
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