(December 12, 2013) The UTSA Institute for Economic Development Center for Community and Business Research was contracted by the West Texas Energy Consortium (WTxEC) to estimate the economic impacts of the oil and gas industry on certain counties in the Consortium in the year 2012, and to create a forecast for the year 2022. The Consortium area consist of the Concho Valley, West Central Texas, and Permian Basin regions.
The study focuses on a core 10-county area within the WTxEC, and explores drilling information as well as economic impacts for them. These counties are Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry, and Sterling. In addition, this study also looks at the indirect economic impacts of oil and gas activities from the core 10-county area into the neighboring 6-county area that consists of Brown, Coke, Coleman, Runnels, Taylor, and Tom Green.
This region has a long history of oil and gas activity and in recent years has been affected not only by renewed attention in vertical wells but also new techniques, such as horizontal drilling coupled with hydraulic fracture stimulation. The study estimates that close to 854 vertical wells and 57 horizontal wells (including 12 directional wells) were completed in 2012.
The total economic output of the core 10-county study region for 2012 was just under $14.5 billion dollars. Other impact highlights include:
- 21,450 full-time jobs supported
- $1 billion in salaries and benefits paid to workers
- $6.2 billion in gross regional product (value added)
- $472 million in state revenues, including $187.4 million in severance taxes
- $447 million in local government revenues
While taking into consideration low and high-price scenarios, the impacts in 2022 could vary widely. But estimated growth in full-time jobs supported by the oil and gas industries could potentially increase by 42.2 percent from 2012-2022. This study estimates a scenario where low prices of oil in the future could produce an output as low as $7.6 billion, and where high prices of oil could see enormous growth, as high as $34.3 billion. The ranges of these figures are broad due to high variability in the prices of oil and gas, the challenges of forecasting future oil and gas activities, changes in the number of wells per rig, and changes in productivity per well.
This baseline study is intended to help communities in West Texas plan and prepare for the prospect for increased oil and gas production in the area down the line. For many counties, activity is clearly in the early stages,” said Thomas Tunstall, Research Director at the UTSA Institute for Economic Development and Principal Investigator for the study.
For a full copy of the report, click here.