Eagle Ford impact pegged at $25 billion in 2011



Eagle Ford impact pegged at $25 billion in 2011

Vicki Vaugha, Express-News

By Vicki Vaughan

Updated 11:38 p.m., Wednesday, May 9, 2012

Eagle Ford impact


(14 counties, 2011 alone)

$12.4 billion total economic impact

23,409 jobs supported (full-time)

$7 billion in gross regional product

$1.8 billion in salaries and benefits to workers


$705 million in total economic impact

4,290 jobs supported

$186 million in salaries and benefits


The Eagle Ford Shale has been touted as a modern-day Spindletop, and a study released Wednesday underscored that view.

The vast oil and gas play in South Texas contributed $25 billion in total economic output to a 20-county South Texas region last year and provided 47,097 full-time jobs, according to a study prepared by the Center for Community and Business Research at the University of Texas at San Antonio's Institute for Economic Development.

In a single year — 2011 — the shale development added more economic oomph to South Texas than an earlier UTSA study predicted would occur over nearly a decade.

That earlier projection estimated that the Eagle Ford would account directly and indirectly for almost $21.5 billion in economic output by 2020.

The new study estimates that the shale will create 117,000 jobs by 2021, more than 11/2 times the 68,000 full-time jobs the earlier study had projected.

Thomas Tunstall, director of UTSA's research center and the study's lead investigator, said Wednesday's study is just the “first chapter” in its look at the shale's impact. In late summer, the center will look at workforce issues, while a third installment will provide more detailed data on a county-by-county basis.UTSA officials said the earlier study was conservative, as is the current one. But shale production “has far exceeded the expectations outlined in the initial report because of rapidly evolving business activity,” the study said.

“The Eagle Ford will ensure growth for our community for decades to come,” said Curt Anastasio, CEO of San Antonio-based pipeline company NuStar Energy LP, who moderated the study's presentation at a luncheon Wednesday at the Grand Hyatt downtown.

A frenzy of drilling is sparking the boom. Oil production in the Eagle Ford increased more than sixfold in 2011 from 2010, and natural gas production more than doubled in the same period, UTSA estimated, using data from the Texas Railroad$ Commission.

UTSA officials stressed that the new study is a new “baseline” look at the effect of drilling in the shale. The current study examined 14 counties directly affected by drilling, along with six counties — including Bexar — that are indirectly involved in the development. America's Natural Gas Alliance paid $90,000 for the study.

In the 20-county region, the study estimated that $3.1 billion in salaries and benefits were paid to workers last year and that the shale impact amounted to $12.63 billion in gross regional product.

Also in the 20-county region, $257 million went into the coffers of local governments, while $358 million went to the state, including $120.4 million in severance taxes paid by drilling companies on production.

The 14 directly affected counties are Atascosa, Bee, DeWitt, Dimmit, Frio, Gonzales, Karnes, La Salle, Live Oak, Maverick, McMullen, Webb, Wilson and Zavala. The six that benefit from the drilling but don't have production are Bexar, Jim Wells, Nueces, San Patricio, Uvalde and Victoria counties.

In the 14 directly affected counties, total economic impact last year was estimated to be almost $20 billion, while the development supported 38,000 full-time jobs and added $211 million to local government revenue.

And all the shale drilling translated to fatter paychecks. As an example, Zavala County, “which had the lowest wages,” grew from an average annual wage of $17,000 in the first quarter of 2005 to an average annual wage of $25,000 in the third quarter of 2011.

Most of the counties saw average weekly wages jump from about $450 to $550 a week to $600 to $700 a week, UTSA's Tunstall said.

The growing importance of the shale was evident by the number of officials who attended the luncheon, including Mayor Julián Castro, UTSA President Ricardo Romo, Texas House Speaker Joe Straus and Railroad Commissioner David Porter.

Earlier Wednesday, at a Real Estate Council of San Antonio breakfast at the Petroleum Club, Adam Haynes, senior director for corporate development and government relations at Chesapeake Energy Corp., estimated that there's at least 30 years of production in the Eagle Ford.

Haynes said he could take a high school graduate and put him to work until he retires, with the ability “to provide for his family like he's never been able to provide for his family.”

Mark Witt, vice president and chief financial officer of San Antonio-based Lewis Energy Group, said the natural gas production company has 1,000 employees and plans to add 350 this year, with 50 of those jobs at its corporate headquarters.

“We've got generations of wealth here,” Witt said. “We need to take advantage of it.”


Jennifer Hiller contributed to this report.

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