|File Size||3.59 MB|
|Create Date||January 16, 2014|
The West Texas Energy Consortium (“Consortium” or WTxEC) is an open forum for coordination and information-sharing, organized by the Workforce Solutions Boards in the Concho Valley, West Central Texas, and Permian Basin regions. The WTxEC has contracted with the Center for Community and Business Research at The University of Texas at San Antonio’s Institute for Economic Development 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.
This 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 will also look 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. These indirect impacts do not include the direct drilling, completion, or production activities for oil and gas in the neighboring 6-county area.
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. Most of the activity is related to oil production in the core 10-county area.
The oil and gas industry in the core 10-county area of the WTxEC in 2012 had an impact close to $14.5 billion, supported nearly 21,450 full-time jobs, paid $1 billion in wages and salaries, generated almost $472 million in state revenues — including $187 million in severance taxes — added approximately $6.2 billion in gross regional product, and contributed nearly $447 million in local governments revenues.
By 2022, those 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.
The estimated growth in full-time jobs supported by the oil and gas industries, from 21,450 in 2012 to 30,500 in 2022 in the core 10-county area, represents an increase of 42.2 percent. This rate of growth almost doubles the estimated 21.7 percent growth in total employment in the area for the same period.
Taking into consideration low- and high-price scenarios, the impacts in 2022 could vary widely. 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.
In 2012 production of natural gas, casinghead gas, oil, and condensate for the core 10-county area were:
- Natural gas and casinghead gas: 211.5 billion cubic feet (Bcf)
- Oil: 76.4 million barrels (MMbo)
- Condensate: 109,351 barrels