The prominent Eagle Ford Shale in southern Texas that has already created thousands of jobs and contributed billions of dollars in regional output continues to grow at a faster-than-expected pace, fueling robust contributions to the local economy.
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The oil and gas rush in the nation's second-largest state is now supporting 116,000 jobs, according to a new report by the University of Texas at San Antonio's Institute for Economic Development.
The shale now ranks as the largest single oil and gas development in the world based on capital expenditures, with companies expected to spend $28 billion there in 2013.
The university group, which hosts centers and an array of programs dedicated to growing the Texas economy, released its second annual report on Eagle Ford to legislators in Austin on Tuesday. It was released to the public on Thursday.
In 2011, the Eagle Ford Shale, which affects some 20 counties in southern Texas, was estimated by the university to contribute $25 billion in output, $12.63 billion in gross regional product and support just 47,097 full-time jobs in 2011.
It had predicted at the time that by 2021, the region’s oil and gas industry would be supporting 116,972 full-time jobs, while contributing $62.3 billion in output and $42 billion in gross regional product.
However, UTSA Center for Business and Community Research director Thomas Tunstall told the News-Journal that the economic impact has been greater than expected.
“I didn’t expect to see the ramp-up so quickly in terms of the actual jobs in 2012 versus 2011,” he said. “I frankly thought it would be more gradual.”
The U.S. has been undergoing a shale boom with major gas companies like Chesapeake Energy (NYSE:CHK) and ConocoPhillips (NYSE:COP) ramping up shale production across the country. The Eagle Ford Shale saw production jump an estimated 50% in January month-over-month, according to the Texas Railroad Commission.
The shale revolution has been attributed to limited gas reserves that drove higher gas prices and triggered a desire to cut down on costs, as well as skyrocketing demand and consumption.
Technological advances, particularly in horizontal drilling and fracturing, have also contributed to the recent adoption, quickening drilling and completion times and reducing manufacturing expenses.
In a report released in October, the University of Texas’s Institute for Economic Development claimed its study portrayed a “detailed image of the challenges and opportunities emerging from drilling and production activities in South Texas.”
It has long warned, however, that the reports give a broader snapshot of activity and that the situation in the Eagle Ford is in constant flux, subject to change on a daily basis.