In the height of the oil and gas industry downturn, more state tax revenue was collected in 2016 than before drilling in the Eagle Ford Shale began, said Omar Garcia, the South Texas Energy and Economic Roundtable president.
“When you look at rural South Texas not seeing economic development activity like metropolitan areas and other parts of Texas, the Eagle Ford Shale and oil and gas industry have provided numerous opportunities of sustained growth and a steady stream of tax revenue,” said Garcia.
The organization recently funded a study of the economic impact of the Eagle Ford Shale. The study was conducted by the Center for Community and Business Research at the University of Texas at San Antonio’s Institute for Economic Development. A similar study is done every few years, with the last being in 2013.
During the past year, the price of oil has more than doubled, signaling opportunities for future growth, Garcia said. Since August 2014, the price of oil dropped from more than $100 per barrel to $43.4 by March 2015. The price bottomed out in February 2016 at $26.2 per barrel. By January, the price per barrel reached $53.
“The oil and gas industry is still the backbone of the economy and is still a vital component of South Texas despite the downturn,” Garcia said. “The new normal of South Texas is steady, sustained growth, with the price of oil steadying at $50 a barrel.”
The study looked at the impact of the Eagle Ford Shale in 2014, 2015 and 2016.
“Even during the downturn in 2016 when you had oil dip under $30 a barrel and you had rig counts in the 30s, you still saw an economic impact of $50 billion,” Garcia said. “That’s significant.”
People started to drill in the Eagle Ford Shale in 2010 on a small scale. Large company investments came in 2011 and 2012, he said. The oil industry downturn began in mid-2015 and lasted most of 2016.
Many workers left the oil industry during the downturn and never returned, Garcia said. With the growth of the oil and gas industry, manufacturing and plant expansions, a strong workforce is needed in the Crossroads.
“One of the things to consider when you enter the oil and gas field, you’re going to be highly trained (and) you’re going to develop skills that can transfer to other jobs in the event that we have another downturn or you’re laid off,” he said.
SOURCE: Victoria Advocate