Study: West Texas Shale Region Supports 21,000 Jobs

The University of Texas at San Antonio’s Institute for Economic Development released a study last week that concludes that the oil and natural gas industry had a massive $14.5 billion impact in West Texas in 2012 – more specifically the burgeoning Cline Shale region. This included more than 21,000 jobs, with $1 billion in salaries and benefits to workers over a 10-county area. Not only did the study provide impressive 2012 data, it also forecasted growth through 2022 to better prepare counties for early planning.

Granted, this region has a long history of oil and natural gas activity, as it’s located within the bounds of the vast Permian Basin. Production has been at record levels with the help of vertical wells and advanced techniques, such as horizontal drilling coupled with hydraulic fracturing.  The data coming out of this region prove once again that the oil and natural gas industry is positively impacting the Texas economy, and will clearly continue to do so.

Key highlights of the Cline Shale economic report include:

  • $14.5 billion in total economic output
  • 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

In 2012, within the 10-county area, 76.4 million barrels of oil were produced and represented close to 16 percent of the total oil production from Texas.  According to the Texas Comptroller of Public Accounts, in 2012, the total value of oil production in Texas reached $67.8 billion, and in this 10-county area, the oil production value was pegged at $7.8 billion. That’s close to 11.5 percent of the total value of all of the oil produced in the state!

When estimating the impacts of oil and natural gas production in 2022, the UTSA study notes that numbers vary due to the difficulty of predicting future production.  Nonetheless, the study estimates:

“[B]y 2022, economic impacts will grow to $20.5 billion in output, supporting 30,500 full-time jobs, paying $1.8 billion in wages and salaries, generating $701 million in state revenues — including $334 million in severance taxes — creating close to $9.4 billion in gross regional product, and contributing about $664 million in local government revenues.” (emphasis added)

These numbers show full-time jobs supported by the oil and natural gas industry could increase by an amazing 42.2 percent by 2022. While this is the high side of the scale, it clearly shows how valuable the industry is for the Texas economy and hardworking families not just in West Texas, but indeed all across the state.

As mentioned earlier, the study is also an effort to prepare counties for future growth.  As Thomas Tunstall, Research Director at the UTSA Institute for Economic Development and Principal Investigator for the study, stated:

“This baseline study is intended to help communities in West Texas plan and prepare for the prospect for increased oil and natural gas production in the area down the line. For many counties, activity is clearly in the early stages.”

While many of the figures presented here represent the high end of the spectrum, the findings in the UTSA report are still a testament to how oil and natural gas development in the state of Texas is spurring economic growth and providing high-paying jobs.

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