EnergyFactor By ExxonMobil | Pespectives has a new home

Eagle Ford Shale economic data show the potential of U.S. shale plays

“…an economic opportunity of a lifetime.”

That’s how Mario Hernandez, president of the San Antonio Economic Development Foundation, describes the advances in technology that have led to a boom in oil and natural gas production in his city and the counties in south central Texas that sit atop the Eagle Ford Shale play.

Hernandez’s comments are found in a new study, “Economic Impact of the Eagle Ford Shale,” produced by the Center for Community and Business Research at the University of Texas at San Antonio. If you read this study, you’ll see Hernandez is not exaggerating; the economic benefits of Eagle Ford Shale development – in terms of jobs, economic activity and revenue to state and local governments – are significant.

The study’s main conclusion: In the 14 counties directly benefiting from Eagle Ford Shale development, the total economic impact of this development in 2011 was nearly $20 billion. The study indicates this positive economic impact may rise to $62 billion – and perhaps as high as $96 billion – just in the next 10 years.

The study projects that by 2021, the Eagle Ford Shale could:

  • Support more than 82,000 jobs in the 14 counties, up from 38,000 in 2011. This includes jobs directly involved in well drilling and completion, extraction, pipeline construction and refining; it also includes jobs in oil services, as well as service industries such as hotels and restaurants.
  • Generate $6 billion in salaries and benefits paid to workers, compared to $2.6 billion in 2011. The study found that wages in Eagle Ford Shale counties have risen significantly as a result of shale activity; in LaSalle County, for example, average weekly wages rose from about $600 in 2005 to more than $950 in 2011.
  • Contribute $1.6 billion in state revenues, up from $312 million in 2011, and $888 million in local government revenues, up from $211 million in 2011.

Those are some impressive numbers. But why should Americans care about what’s going on in 14 counties in south central Texas?

Because what’s happening in the Eagle Ford Shale and throughout Texas is also happening to varying degrees elsewhere – in North Dakota’s Bakken Shale, the Marcellus Shale in Pennsylvania and the Fayetteville Shale in Arkansas, to name a few. In states across the country, technologies developed in the United States have unlocked vast stores of oil and gas in shale rock formations and led to steep climbs in energy production.




For example, in 2011, natural gas production from the Eagle Ford Shale was up 150 percent over 2010. Oil production rose more than 500 percent. Production is expected to continue growing dramatically in the next decade.

Economic benefits, locally and nationwide

Rising U.S. shale production has brought with it many of the things we know our economy needs right now: good jobs, revenue to fund government services, and a renewed sense of economic optimism in many communities.

In another major Texas shale play – the Barnett – a recent study showed that activities there accounted for $65 billion in economic output in the past decade. In Oklahoma, officials said recently that the oil and gas industry contributed $61 billion to the state’s economy last year. In Pennsylvania, Lieutenant Governor Jim Cawley called shale gas a “game changer” for the commonwealth, as a Penn State University report found that sales tax revenues have increased by an average of 24 percent since 2007 in counties with shale activity.

But the economic benefits of this shale “game changer” go beyond counties – or even states.

Across the country, U.S. energy consumers are benefitting from these new supplies as they contribute to help lower their energy costs. And because natural gas is used for industrial purposes, U.S. manufacturers of everything from plastic to steel have been expanding their activities in the United States.

The Eagle Ford Shale study cites one such example: Methanex, a global methanol producer, plans to dismantle an idled Chilean factory and reassemble it in Louisiana in order to take advantage of natural gas supplies being developed in the United States.

There’s a lot more in the study – including commentary from those who are directly involved in the transformational changes brought about by the Eagle Ford Shale and discussion about the challenges that communities can face with rapid growth. You can download the study at a new website, Texas Natural Gas Now, which contains more information and discussion about the state’s shale resources.

From the many voices of those living and working in the Eagle Ford Shale, it’s clear that industry, government and citizens each have a role to play in ensuring domestic shale resources are produced safely, responsibly and efficiently. It’s also clear that this activity is growing jobs, expanding government revenue, promoting economic opportunity and strengthening U.S. energy security. That’s what Mario Hernandez is counting on.

“We really think that if we maximize the impact it will have dramatic change and improvement of a regional economy for many years to come.”

  • Worth a deeper look...