economic impact of oil and gas - activities in the west texas

THE WEST TEXAS ENERGY CONSORTIUM (“CONSORTIUM”

OR WTXEC) IS AN OPEN FORUM FOR COORDINATION AND

INFORMATION SHARING, ORGANIZED BY THE

WORKFORCE SOLUTIONS BOARDS IN CONCHO VALLEY,

WEST CENTRAL TEXAS, AND PERMIAN BASIN REGIONS.

ECONOMIC IMPACT OF OIL AND GAS

ACTIVITIES IN THE WEST TEXASENERGY CONSORTIUM REGION

2014

For More Information Please Visit Our Websiteccbr.iedtexas.org

This report was prepared by the Center for Community and Business Research at The University of Texas of San Antonio’s Institute for Economic Development. The project was supported with funding from the West Texas Energy Consortium. Any findings, conclusions, or opinions are those of the authors and not necessarily those reflected by The University of Texas at San Antonio or the West Texas Energy Consortium.

Principal investigator: Thomas Tunstall, PhD; Lead Investigator: Javier Oyakawa, M.A., MSc.Researchers: Vincent Loeffelholz, Gina Conti, Hector Torres, Ricardo Avalos,Jason Hernandez, Binbin Wang, John Rodriguez, Neeraj Ravi, and Feihua Teng.GIS specialist: Hisham Eid

2 UTSA Institute for Economic Development Center for Community and Business Reseach 35

Introduction

Total Impacts 2012 and Projected Impacts for 2022

Total Impacts of Oil and Gas Industry on West Texas 10 County Core AreaDrilling Impacts on West Texas 10 County Core AreaTotal Midstream Impacts on West Texas 10 County Core AreaTotal Extraction Impacts on West Texas 10 County Core AreaDownstream Impacts on West Texas 10 County Core AreaEconomic Impacts by County

Total Output ImpactsTotal Employment ImpactsTotal Gross County Product ImpactsEstimated State Revenue 2012 and 2022Economic Impact on Neighboring Counties

Output Impacts: Neighboring Six CountiesEmployment Impacts: Neighboring Six CountiesPayroll Impact: Neighboring Six CountiesGross County Product: Neighboring Six CountiesCounty Highlights

Fisher CountyGlasscock CountyHoward CountyIrion CountyMartin CountyMitchell CountyNolan CountyReagan CountyScurry CountySterling County

4667888101011121314151516161718192122242527283032

Center for Community and Business Reseach 3

The West Texas Energy Consortium (“Consortium” or WTxEC) is an open forum for coordination and information sharing, organized by the Workforce Solutions Boards in 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.

After a drop in production in the early half of the 2000s, the annual oil production in the United States has dramatically increased, from 3.1 billion barrels in 2008 to 4.1 billion barrels in 2012, ranking it second in the world in oil production behind only Saudi Arabia (4.2 billion barrels). The surge in U.S. domestic oil production is a factor in the recent decrease of the U.S. trade deficit.

Within the United States, the state of Texas has emerged as a leader in domestic oil production. Texas is the home to 858 active rigs, more rigs than any other state in the country. Texas’s rig count represents nearly 25 percent of rigs worldwide.1 Texas has access to the Barnett, Eagle Ford, Granite Wash, Haynesville, Mississippian, and Permian basins: six of the 14 major petroleum basins in the United States.2 The Energy Information Administration in March 2014 recently conducted a study that focuses on the six shale basins that account for 90 percent of the growth in oil and natural gas production in the United States.3 Half of these key oil and shale gas regions are located within the state of Texas.

INTRODUCTION

1 “Rotary Rig Count,” Baker Hughes, Last modified March 21, 2014, http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-reportsother2 “Worldwide Rig Count,” Baker Hughes, Las modified March 5, 2014, http://phx.corporate-ir.net/phoenix.zhtml?c=79687&p=irol-rigcountsintl7 “Drilling Productivity Report For key tight oil and shale gas regions,” EIA.gov last modified March 2014, http://www.eia.gov/petroleum/drilling/

4 UTSA Institute for Economic Development

This study focuses on the impacts of drilling operations in the Permian Basin, a formation that occupies a vast area along 39 counties in West Central and West Texas. The core study area includes Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry, and Sterling counties. The report also includes a secondary study on Brown, Coke, Coleman, Runnels, Taylor, and Tom Green counties, which neighbor the core study area. The region has a long history of oil and gas activity. In recent years renewed attention in vertical wells and new directional drilling techniques such as slant hole and horizontal drilling coupled with hydraulic fracture stimulation have been used.

The purpose of the study is to gauge the growth and the effects that the oil and natural gas industry have for residents and decision makers in the West Texas region as a whole, and for the specific counties in particular. Although industry developments may be still considered recent, the scope and breadth of these impacts are very large, and tangible effects on the region will be felt for years to come.

Figure 1: Oil and Gas Basins with Highest Production Growth 4

4 “Drilling Productivity Report for key tight oil and shale gas regions,” EIA.gov last modified March 2014, http://www.eia.gov/petroleum/drilling/ EIA map based on production growth. For this reason the Barnett shale formation is not included.


The total impact of oil and gas industry activity in the 10 counties in 20225 is forecasted to be more than $20 billion in the moderate scenario, with 30,540 jobs anticipated, and revenues of $664 million for the local governments and $701 million for the state government.

For 2012 the oil and gas industry in the 10 counties is estimated to have total impacts close to $14.5 billion, support 21,450 full-time-equivalent (FTE) jobs, generates revenues of $446 million for the local governments and $472 million for the state government.

TOTAL IMPACTS 2012 ANDPROJECTED IMPACTS FOR 2022

5 The methodology for the study follows the steps explained in Javier Oyakawa, A Framework for the Study and Forecast of Labor Force, Employment, Population, Migration, and Commute Changes in the Eagle Ford Shale, (2014,March). Paper presented at the 44th Annual Conference of the Urban Affairs Association, March 19-22, 2014. San Antonio, Texas. PDF file.

Figure 2 Wells in Production, 10 County Area


Taking into consideration all three scenarios, the impacts can be summarized as:• Output regional impact between $7.6 and $34.3 billion;• Employment regional impact between 11,800 and 49,700 jobs; and• Gross regional product impact between $3.4 billion and $16.2 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 worker for relevant industries in the study. As with the 2012 impacts, the IMPLAN model was adjusted to avoid double counting the impacts of several industries in the same area.

Economic Output for the oil and gas production in the core ten county area may be further broken down based on the type of activity related to production. Economic activity for 2012 and forecasted for 2022 related to drilling, midstream, extraction and downstream (refining) are shown on the following table.

Due to the uncertainty in future oil and gas prices, the study forecasted three different scenarios according to price estimations by the Energy Information Agency (EIA). These prices correspond to three scenarios: low prices, moderate prices, and high prices.

Estimated Impacts for West Texas Energy Consortiumat the Regional Level 2022 in Millions of dollars*

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* 2012 dollars Source: IMPLAN software version 3, database 2011 Taking into consideration all three scenarios, the impacts can be summarized as:

• Output regional impact between $7.6 and $34.3 billion; • Employment regional impact between 11,800 and 49,700 jobs; and • Gross regional product impact between $3.4 billion and $16.2 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 worker for relevant industries in the study. As with the 2012 impacts, the IMPLAN model was adjusted to avoid double counting the impacts of several industries in the same area. Economic Output for the oil and gas production in the core ten county area may be further broken down based on the type of activity related to production. Economic activity for 2012 and forecasted for 2022 related to drilling, midstream, extraction and downstream (refining) are shown on the table below.

Drilling Impacts on West Texas 10 County Core Area

Total Impacts of Oil and Gas Industryon West Texas 10 County Core Area

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Table 1

Total Impacts of Oil and Gas Industry on West Texas 10 County Core Area

2012 Impacts

Estimated 2022 Impacts (Moderate Projections)

Total Economic Output (millions)

$14,489.2

Total Economic Output

(millions) $20,524

Total Jobs Supported

21,458

Total Jobs Supported 30,540

Total Gross Regional

Product Impact (millions)

$6,212.2



$9,434

Total State Revenues

(millions)

$471.9

Total State Revenues (millions) $701

Total Local Government Revenues (millions)

$446.5


$664

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Table 1


2012 Impacts



$14,489.2


(millions) $20,524


21,458




$6,212.2



$9,434


(millions)

$471.9



$446.5


$664

8


Table 1


2012 Impacts



$14,489.2


(millions) $20,524


21,458




$6,212.2



$9,434


(millions)

$471.9



$446.5


$664

2012 Impacts Estimate 2022 Impacts(Moderate Projections)

.0

.0

.0



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2012 Drilling and Completion Impacts

Estimated 2022 Drilling Impacts (Moderate Scenario)

Total Output

(millions)

$2,558.1

Total Output (millions) $3,212.4

Total Employment

6,597

Total Employment 9,188


Product (millions)

$936.0



$1,505.3

Total Midstream Impacts on West Texas 10 County Core Area

2012 Midstream Impacts

Estimated 2022 Midstream Impacts

(Moderate Scenario)

Total Output

(millions)

$142.5

Total Midstream Output (millions) $0

Total Employment

959

Total Employment 0



$64.6



$0


Total Extraction Impacts on West Texas 10 County Core Area

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2012 Extraction Impacts

Estimated 2022 Extraction Impacts

(Moderate Scenario)

Total Output

(millions)

$8,932.7


Total Employment

12,383



Product (millions)

$4,610.0



$1,223.8

Downstream Impacts on West Texas 10 County Core Area

2012 Downstream Impacts

Estimated 2022 Downstream Impacts

(Moderate Scenario)

Total Output

(millions)

$2,773.4

Total Output (millions)

$3,555.5

Total Employment

914




$550.9



$602.8


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2012 Extraction Impacts

Estimated 2022 Extraction Impacts

(Moderate Scenario)

Total Output

(millions)

$8,932.7


Total Employment

12,383



Product (millions)

$4,610.0



$1,223.8


2012 Downstream Impacts

Estimated 2022 Downstream Impacts

(Moderate Scenario)

Total Output

(millions)

$2,773.4

Total Output (millions)

$3,555.5

Total Employment

914




$550.9



$602.8

Drilling Impacts on West Texas 10 County Core Area

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2012 Drilling and Completion Impacts

Estimated 2022 Drilling Impacts (Moderate Scenario)

Total Output

(millions)

$2,558.1


Total Employment

6,597



Product (millions)

$936.0



$1,505.3


2012 Midstream Impacts

Estimated 2022 Midstream Impacts

(Moderate Scenario)

Total Output

(millions)

$142.5

Total Midstream Output (millions) $0

Total Employment

959

Total Employment 0



$64.6



$0 $13,770.0

Table 2

Between the fourth quarter of 2011 to the fourth quarter of 2012, for the aggregate of all 10 counties, employment increased by 737 jobs, a 2.20 percent increase. For the 10 counties, the highest growth rate corresponds to other services (8.80 percent increase); followed by the natural resources and mining sector (8.00 percent increase), and the manufacturing sector (7.80 percent increase).

Another indicator of the benefits from the West Texas oil and gas production is the amount of sales taxes that these counties generate, divided into four quarters, between 2002 and 2012. The 10-county area’s total sales subject to state sales tax had an increase of $340 million by the end of this time span. The following graph shows the original values in blue and the smoothed values in orange. The smoothed values represent a four-quarter average.

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Between the fourth quarter of 2011 to the fourth quarter of 2012, for the aggregate of all 10 counties, employment increased by 737 jobs, a 2.20 percent increase. For the 10 counties, the highest growth rate corresponds to other services (8.80 percent increase); followed by the natural resources & mining sector (8.00 percent increase), and the manufacturing sector (7.80 percent increase).

Table 2

Employment Changes in 10-‐County Region 2011 4th Quarter to 2012 4th Quarter

Industry Employment 2011 4th Quarter

Employment 2012 4th Quarter

Employment Change

Percent Growth, 2011-‐2012

Other Services 894 973 79 8.80% Natural Resources &

Mining 4,910 5,304 394 8.00%

Manufacturing 2,029 2,187 158 7.8% Leisure & Hospitality

Group 2,693 2,884 191 7.10%

Construction 2,213 2,338 125 5.60%

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Education & Health Services 9,219 9,333 114 1.20%

Trade, Transport. & Utilities 6,904 6,855 -49 -0.70%

Financial Activities Group 1,048 1,018 -30 -2.80%

Information 232 224 -8 -3.40% Public Administration 2,474 2,319 -155 -6.30% Professional Business

& Other Services 1,105 1,023 -82 -7.40%

Total, All Industries 33,721 34,458 737 2.20% Source: Texas Workforce Commission, QCEW quarterly data.

Another indicator of the benefits from the West Texas oil and gas production is the amount of sales taxes that these counties generate, divided into four quarters, between 2002 and 2012. The 10-‐county area’s total sales subject to state sales tax had an increase of $590.8 million by the end of this time span. The following graph shows the original values in blue and the smoothed values in orange. The smoothed values represent a four-‐quarter average.

Chart 1

Employment Changes in 10-County Region2011 4th Quarter to 2012 4th Quarter

The economic impacts of the oil and gas industry across different counties are diverse. The most affected counties in 2012 are Howard County ($4.2 billion), Martin County ($2.9 billion), and Scurry County ($1.9 billion). Projections of 2022 impacts show Howard County having the most total output ($4.5 billion). Reagan County follows with the second most output ($4.4 billion), and Irion third place ($3.2 billion). Fisher and Sterling Counties appear to be affected the least among the 10 counties in 2012 and 2022.

ECONOMIC IMPACTSBY COUNTY

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Source: CCBR Estimations using IMPLAN The most impacted WTxEC counties in terms of 2012 employment are Martin County (4,610 full-‐time equivalent (FTE) jobs), Scurry County (2,966 FTE jobs), and Howard County (2,808 FTE jobs). 2022 projections show the most impacted counties are Reagan County (5,131 FTE jobs), Irion County (4,586 FTE jobs), and Martin County (4,002 FTE jobs). The counties least impacted in terms of employment are Sterling County with 637 FTE jobs and Fisher County with 590 FTE jobs.

Scurry

$1,903.4

Irion $3,238.9

Reagan

$1,771.5

Martin $2,666.7

Glasscock

$1,468.7

Glasscock $1,871.2

Irion

$856.7

Nolan $1,484.8

Mitchell

$727.0

Mitchell $1,080.9

Nolan

$556.8

Scurry $564.7

Sterling

$178.9

Fisher $384.9

Fisher

$176.3

Sterling $383.2

Total Employment Impacts

County

2012 Total Full-‐Time Employment

Country

2022 Total Full-‐

Time Employment

Martin

4,610

Reagan 5,131

Scurry

2,966

Irion 4,586

Howard Martin 4,002

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Total Output Impacts

County

2012 Total Output

Impact (millions)

Country

2022 Total

Output Impact (millions)

Howard

$4,238.9

Howard $4,461.0

Martin

$2,863.2

Reagan $4,360.0

Total Output Impacts


County

The most impacted WTxEC counties in terms of 2012 employment are Martin County (4,610 FTE jobs), Scurry County (2,966 FTE jobs), and Howard County (2,808 FTE jobs). The 2022 projections show the most impacted counties are Reagan County (5,131 FTE jobs), Irion County (4,586 FTE jobs), and Martin County (4,002 FTE jobs). The counties least impacted in terms of employment are Sterling County with 637 FTE jobs and Fisher County with 590 FTE jobs.

The gross county product (GCP) impacts provide a better picture of the benefits of oil and gas activities because values include only earnings and profits and do not double count them as might happen with the output numbers. The most impacted counties in 2012 are Martin County ($1.4 billion), Howard County ($1.2 billion), and Scurry County ($985 million). For 2022 Reagan County ranks first ($2.1 billion) Irion is second ($1.5 billion), and Martin takes the third place ($1.3 billion).


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Source: CCBR Estimations using IMPLAN The most impacted WTxEC counties in terms of 2012 employment are Martin County (4,610 full-‐time equivalent (FTE) jobs), Scurry County (2,966 FTE jobs), and Howard County (2,808 FTE jobs). 2022 projections show the most impacted counties are Reagan County (5,131 FTE jobs), Irion County (4,586 FTE jobs), and Martin County (4,002 FTE jobs). The counties least impacted in terms of employment are Sterling County with 637 FTE jobs and Fisher County with 590 FTE jobs.

Scurry

$1,903.4

Irion $3,238.9

Reagan

$1,771.5

Martin $2,666.7

Glasscock

$1,468.7

Glasscock $1,871.2

Irion

$856.7

Nolan $1,484.8

Mitchell

$727.0

Mitchell $1,080.9

Nolan

$556.8

Scurry $564.7

Sterling

$178.9

Fisher $384.9

Fisher

$176.3

Sterling $383.2


County

2012 Total Full-‐Time Employment

Country

2022 Total Full-‐

Time Employment

Martin

4,610

Reagan 5,131

Scurry

2,966

Irion 4,586

Howard Martin 4,002

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Source: CCBR Estimations using IMPLAN

The gross county product (GCP) impacts provide a better picture of the benefits of oil and gas activities because values include only earnings and profits and do not double count them as might happen with the output numbers. The most impacted counties in 2012 are Martin County ($1.4 billion), Howard County ($1.2 billion), and Scurry County ($985 million). For 2022 project Reagan County ranks first ($2.1 billion) Irion is second place ($1.5 billion), and Martin takes the third place ($1.3 billion).

2,808

Reagan

2,600

Nolan 3,714

Glasscock

1,657

Howard 2,783

Nolan

1,640

Glasscock 1,884

Mitchell

1,348

Mitchell 1,810

Irion

1,247

Scurry 1,208

Fisher

394

Sterling 637

Sterling

275

Fisher 590

Total Gross County Product Impacts

County

2012 Total Gross County Product

Impact (millions)

Country

2022 Total Gross Country Product

Impact (millions)

Martin

$1,388.1

Reagan $2,134.0

Howard

$1,154.0

Irion $1,524.7

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Scurry

$985.0

Martin $1,385.4

Reagan

$817.9

Howard $1,191.9

Glasscock

$686.4

Glasscock $934.3

Irion

$385.0

Nolan $757.9

Mitchell

$343.4

Mitchell $557.0

Nolan

$249.3

Scurry $297.0

Sterling

$87.2

Fisher $198.1

Fisher

$77.5

Sterling $186.3

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The gross county product (GCP) impacts provide a better picture of the benefits of oil and gas activities because values include only earnings and profits and do not double count them as might happen with the output numbers. The most impacted counties in 2012 are Martin County ($1.4 billion), Howard County ($1.2 billion), and Scurry County ($985 million). For 2022 project Reagan County ranks first ($2.1 billion) Irion is second place ($1.5 billion), and Martin takes the third place ($1.3 billion).

2,808

Reagan

2,600

Nolan 3,714

Glasscock

1,657

Howard 2,783

Nolan

1,640

Glasscock 1,884

Mitchell

1,348

Mitchell 1,810

Irion

1,247

Scurry 1,208

Fisher

394

Sterling 637

Sterling

275

Fisher 590


County

2012 Total Gross County Product

Impact (millions)

Country

2022 Total Gross Country Product

Impact (millions)

Martin

$1,388.1

Reagan $2,134.0

Howard

$1,154.0

Irion $1,524.7


County


Estimated State Revenue 2012 and 2022

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The estimated state revenue provides a better picture of the economic benefits that the state of Texas gathered in 2012.This state revenue was then broken down by the amount gathered by each respective county. For 2012, the counties with the highest estimated state revenue are Martin ($115.7 million), Scurry ($85.1 million), and Glasscock ($61.8 million). Based on the predictions and calculations, the counties with the highest estimated state revenue for 2022 are Reagan ($157.0 million), Irion ($117.3 million) and Martin ($115.0 million).

Estimated State Revenue 2012 and 2022

County

Estimated State Revenue 2012 (millions)

County

Estimated State

Revenue 2022 (millions)

Martin

$115.7 Reagan $157.0

Scurry

$85.1 Irion $117.3

Glasscock

$61.8 Martin $115.0

Reagan

$61.3 Glasscock $81.5

Howard

$54.6 Nolan $58.0

Irion

$31.6 Howard $52.7

Mitchell

$28.7 Mitchell $48.4

Nolan

$15.8 Scurry $22.1

Sterling

$6.7 Fisher $17.2

Fisher

$5.8 Sterling $12.7


The estimated state revenue provides a better picture of the economic benefits that the state of Texas gathered in 2012.This state revenue was then broken down by the amount gathered by each respective county. For 2012, the counties with the highest estimated state revenue are Martin ($115.7 million), Scurry ($85.1 million), and Glasscock ($61.8 million). Based on the predictions and calculations, the counties with the highest estimated state revenue for 2022 are Reagan ($157.0 million), Irion ($117.3 million) and Martin ($115.0 million).

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The report on the six counties neighboring the core study area demonstrate their supporting roles in the oil and gas play. The 2012 and forecasted 2022 impacts of the oil and gas in these six counties are ranked in the following tables. The first table shows the counties ranked in terms of total economic output, or the quantity of goods and services produced by the individual counties. Using the IMPLAN software under a moderate growth scenario, we forecast that each county’s economic output will grow significantly over the period between 2012 and 2022. The three most affected neighboring counties in terms of output for 2012 are Tom Green County ($111.5 million), Taylor County ($56.4 million), and Runnels County ($8.7 million). The forecasts for 2022 show that Tom Green ($148.5 million), Taylor ($80.8 million), and Runnels County ($12.9 million) will continue to have the largest output in 2022. Growth in total gross output will be found in all counties. Our forecasts show that in Coleman County, the neighboring county with the lowest output impact, the total gross output will increase by 55.6 percent.

ECONOMIC IMPACT ONNEIGHBORING COUNTIES


The employment impacts of the oil and gas industry in the neighboring six counties are measured in full-time-equivalent (FTE) jobs. The most impacted neighboring counties in terms of employment in 2012 are Tom Green County (460 FTE jobs), Taylor County (377 FTE jobs), and Brown County (28 FTE jobs). The least impacted neighboring counties in terms of employment are Coleman County (seven FTE jobs), Coke County (eight FTE jobs) and Runnels (21 FTE jobs). In 2022 employment in the six neighboring counties is estimated to grow by 42.5 percent, with Tom Green (665 FTE jobs), Taylor (528 FTE jobs) and Brown (39 FTE jobs) adding the most jobs over the study period.

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County ($111.5 million), Taylor County ($56.4 million), and Runnels County ($8.7 million). The

forecasts for 2022 show that Tom Green ($148.5 million), Taylor ($80.8 million), and Runnels

County ($12.9 million) will continue to have the largest output in 2022. Growth in total gross

output will be found in all counties. Our forecasts show that in Coleman County, the

neighboring county with the lowest output impact, the total gross output will increase by 55.6

percent.


The employment impacts of the oil and gas industry in the neighboring six counties are measured in full-‐

time-‐equivalent (FTE). The most impacted neighboring counties in terms of employment in 2012 are

Tom Green County (460 FTE jobs), Taylor County (377 FTE jobs), and Brown County (28 FTE jobs). The

least impacted neighboring counties in terms of employment are Coleman County (seven FTE jobs),

Coke County (twelve FTE jobs) and Runnels (21 FTE jobs). 2022 employment in the six neighboring

Output Impacts: Neighboring Six Counties

County

2012 Total Gross

Output (millions)

County

2022 Total Gross

Output (millions)

Tom Green

$111.5

Tom Green

$148.5

Taylor

$56.4

Taylor

$80.8

Runnels

$8.7

Runnels

$12.9

Brown

6.9

Brown

$10.5

Coke

$2.2

Coke

$3.1

Coleman

$.9

Coleman

$1.4

Total Output Impacts: Neighboring Six Counties

Employment Impacts: Neighboring Six Counties

22

counties is estimated to grow by 42.5 percent, with Tom Green (665 FTE jobs), Taylor (528 FTE jobs) and

Brown (39 FTE jobs) adding the most jobs over the study period.


Employment Impacts: Neighboring Six Counties

County

2012 Total Employment

County

2022 Total Employment

Tom Green

460

Tom Green 665

Taylor

377

Taylor 528

Brown

28

Brown 39

Runnels

21

Runnels 30

Coke

8

Coke 12

Coleman

7

Coleman 10


Payroll connected to the oil and gas industry is forecasted to grow steadily in the neighboring six county area along with employment. The total payroll for the neighboring six counties accounted for a total $27.2 million, with Tom Green County ($13.9 million), Taylor County ($11.3 million), and Brown County ($1.2 million) having a large percentage of the area’s total payroll impacts. The payroll impacts of the oil and gas industry are forecasted in 2022 to increase to $38.1 million.

The gross county product (GCP) impacts offer a clearer picture of oil and gas activities by focusing only on the earnings and profits that remain in area. Using GCP prevents the double counting of values, which may take place in total output impacts. The GCP in the neighboring six counties totaled $92.8 million with Tom Green County ($59.3 million) and Taylor County ($27.8 million) ranking first and second in terms of GCP. In 2022 the neighboring six county’s GCP is forecasted to increase to $126.9 million with Tom Green County and Taylor County representing over 93 percent of this total.

24


The gross county product (GCP) impacts offer a clearer picture of oil and gas activities by

focusing only on the earnings and profits that remain in area. Using GCP prevents the double

counting of values, which may take place in total output impacts. The GCP in the neighboring

six counties totaled $92.8 million with Tom Green County ($59.3 million) and Taylor County

($27.8 million) ranking first and second in terms of GCP. In 2022 the neighboring six county’s

GCP is forecasted to increase to $126.9 million with Tom Green County and Taylor County

representing over 93 percent of this total.

Payroll Impact: Neighboring Six Counties

County

2012 Total Payroll

(millions)

County

2022 Total Payroll

(millions)

Tom Green

$13.9

Tom Green $19.1

Taylor

$11.3

Taylor $16.1

Brown

$1.2

Brown $1.7

Runnels

$.6

Runnels $.8

Coleman

$.1

Coleman $.2

Coke

$.1

Coke $.2

Payroll Impacts: Neighboring Six Counties

Gross County Impacts: Neighboring Six Counties

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Gross County Product: Neighboring Six Counties

County

2012 Gross County

Product (millions)

County

2022 Gross County

Product (millions)

Tom Green

$59.3

Tom Green $78.9

Taylor

$27.8

Taylor $39.5

Brown

$2.5

Brown $3.7

Runnels

$2.1

Runnels $3.0

Coke

$.7

Coleman $0.9

Coleman

$.4

Coke $.0.6

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COUNTYHIGHLIGHTS

Population Growth Comparison

Fisher County’s population growth falls behind the rate of Texas and the study area, according to the U.S. Census Bureau. By 2012, the population of Texas and the WTxEC study area has increased by 22.2 percent and 2.7 percent, while the population of Fisher County has decreased by 9.7 percent when compared to 2001.

Job Growth Comparison

Employment in Fisher County decreased 9.8 percent in the twelve-year study period. Fisher County’s employment rate has not been consistent with the WTxEC study region or state, which have grown respectively by 14.7 percent and 11.3 percent when compared to 2001.

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Glasscock County’s population growth falls behind the state of Texas and the WTxEC study area. Compared to the 22.2 percent increase of Texas, the study area only increased 2.7 percent during the last twelve years, while Glasscock County decreased 6.8 percent when comparing 2001 and 2012. Glasscock County’s population has not been consistent with the region or the state.

Natural Resource and Mining Employment Growth Comparison

Employment in the natural resources and mining super sector increased 51.2 percent for the state of Texas and 74.5 percent for the study area in the period between 2001 and 2012. In Fisher County, the employment for the super-sector was not stable, peaking at 35.1 percent in 2005, decreasing to 13.0 percent in 2011, and decreasing 3.9 percent in 2012 when compared to 2001. The decline in employment for the sector has followed the same trend as total employment, but has shown a higher degree of turbulence.

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Employment growth for Glasscock County during the study period is erratic, but has shown a major upswing since 2009. Glasscock County reached the same 14.7 percent rate as the state of Texas in 2012, outpacing the WTxEC study area’s 11.3 percent job growth when compared to 2001.


Employment in the natural resources and mining super-sector increased 51.2 percent in Texas and 74.5 percent for the WTxEC study area between 2001 and 2012. Glasscock County’s employment growth within the sector has increased to a more modest 22.9 percent between 2001 and 2012.

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The population of Howard County has grown by 6.4 percent during the past twelve years. This population growth is consistently higher than the 2.7 percent average of the WTxEC study area, but both percentages are lower than the 22.2 percent average for the state of Texas.


Employment grew in Howard County at a 3.4 percent lower rate than in the state of Texas over the twelve-year study period. The employment growth percentages for the state of Texas, Howard County, and the WTxEC study area followed a similar pattern.

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Irion County’s population has decreased 6.0 percent when compared to 2001. This rate is much lower than the 2.7 percent increase in the WTxEC study area and 22.2 percent increase in the state of Texas.


Howard County’s employment in the natural resources and mining sector grew by 76.4 percent over the twelve-year study period, which is higher than the WTxEC’s study area growth of 74.5 percent and the state of Texas’s 51.2 percent in the same sector between 2001 and 2012. Development within the oil and gas industry is definitely the driver of growth in Howard County, as the growth in jobs in the sector outpaces total job growth.

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Irion County’s Job growth in the two periods between 2005 and 2008, and 2010 and 2012 far outpaces the similar employment patterns of the WTxEC study area and the state of Texas. The overall job growth in Irion County over the twelve-year study period is 45.4 percent, much higher than rates in the WTxEC study area and the state of Texas.


Employment in Irion County increased to 370.0 percent during the twelve year period. Irion County’s employment of natural resources and mining has been growing at a frenetic pace, almost tripling the growth for the region and state.

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The State of Texas has experienced a population growth that outpaces those of Martin County and the study area according to the U.S. Census Bureau. Martin County’s population rate increased 6.8 percent, compared to the 22.2 percent increase of Texas and 2.7 percent growth in the WTxEC study area. Martin County overtook the growth rate for the region in 2009.


Martin County’s total employment has been growing at a very high pace since 2009, with a growth of 26.7 percent over the past twelve years. During the same time period job growth rate in the state of Texas grew 14.7 percent and in the WTxEC study area by 11.3 percent.

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Mitchell County’s population has declined by 2.5 percent over the past twelve years according to the U.S. Census Bureau. The state of Texas has experienced a population growth that outpaces that of Mitchell County and the study area. Compared to the 22.2 percent increase in Texas, the study area only increased 2.7 percent during the last decade.


Martin County’s jobs in the natural resources and mining super sector increased by 9.7 percent during the past twelve years, although at a sporadic pace. The natural resources and mining sector growth rate was 51.2 percent for the state of Texas and 74.5 percent in the WTxEC study area between 2001 and 2012.

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Mitchell County’s employment decreased by 3.4 percent during the period between 2001 and 2012. The state of Texas and the study area’s employment grew almost at the same pace, increasing by 14.7 percent and 11.3 percent.


Employment in the natural resource and mining super sector increased by 73.5 percent in Mitchell County and a similar 74.5 percent in the WTxEC study between 2001 and 2012. Both these sector job growth rates topped the average for the state of Texas’s 51.2 percent rate.

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Population in Nolan County has decreased 3.7 percent during the twelve years between 2001 and 2012. Population growth in the WTxEC area is positive at 2.7 percent, but is far outpaced by the 22.2 percent growth rate of the state of Texas.


Total employment grew by 5.7 percent in Nolan County and 14.7 percent for the state of Texas between 2001 and 2012. Employment grew by 11.3 percent in the study area during this same period. The employment growth for Nolan County has been decreasing for the last two years.

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Reagan County’s population increased by 7.6 percent between 2001 and 2012 according to the U.S Census Bureau. This rate was higher than the 2.7 percent growth rate in the population of WTxEC study area, but lower than the 22.2 percent population growth in Texas.


Employment in the natural resources and mining super sector increased by 51.2 percent for the state of Texas, and 74.5 percent for the study area between 2001 and 2012. In Nolan County, the employment for the super sector grew by 26.0 percent in that same period. Nolan County has followed a similar pattern as the rest of the region and state, however currently has the lowest growth rate among the three areas.

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Employment in Reagan County increased by 85 percent between 2001 and 2012, outpacing the 14.7 percent growth rate of Texas and the 11.3 percent growth rate of the WTxEC study area during the same period. Employment growth in Reagan County has been increasing steadily since the economic crash of 2008.


Employment in the natural resource and mining sector has increased by 78.6 percent in Reagan County between 2001 and 2012. The WTxEC study area’s 74.5 percent growth and the state of Texas’s 51.2 percent growth in the sector have followed a similar pattern. Reagan County currently has the highest natural resource and mining employment growth rate in the WTxEC study area.

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Scurry County’s population increased 8.1 percent between 2001 and 2012 according to the U.S. Census Bureau. While population has grown at a higher rate on average in the state of Texas at 22 percent, Scurry County’s population growth remained higher than the WTxEC study area’s 2.7 percent growth average in all 12 years of the study period.


Employment increased 29.9 percent in Scurry County between 2001 and 2012. Scurry County’s total employment has grown at a higher pace than the WTxEC region or state, and has been on a constant increase since 2009. Unlike Scurry County, the state of Texas and the study area’s employment grew almost at the same pace, increasing by 14.7 percent and 11.3 percent, respectively, between 2001 and 2012.

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Job growth in the natural resources and mining super sector grew by 97.8 percent in Scurry County, surpassing the 74.5 percent growth rate in the study area and the 51.2 percent Texas state average in the super sector. Scurry County’s employment of natural resources and mining has been growing at an extremely high rate since 2009.

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Population has decreased in Sterling County by 11.2 percent during the past twelve years. Population in the WTxEC study area by 2.7 percent and increased in the state of Texas by 22.2 percent during this same time.


Total employment in Sterling County grew by 20.7 percent between 2001 and 2012, although at an erratic pace. Employment growth in the WTxEC study area and the state of Texas have stayed consistent to relative to one another, increasing by 11.3 percent and 14.7 percent.

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Employment in the natural resource and mining super sector increased by 35.1 percent in Sterling County between 2001 and 2012. Growth in the sector has increased by 51.2 percent in the state of Texas and 74.5 percent in the WTxEC study area over the same period. Sterling County has followed a similar pattern as the rest of the region and state, but currently has the lowest growth rate in the sector.

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This Economic Impact Study was made possible with the financial support of the Texas Workforce Commission and the following contributors:

Abilene Industrial FoundationBallinger Chamber of CommerceBrownwood Economic Development CorporationCity of BronteCity of Robert LeeCity of RotanConcho Valley Electric CooperativeConcho Valley Workforce Development BoardCrockett National BankDevelopment Corporation of SnyderEarly Economic Development CorporationHome Builders Association of San AngeloHoward College – San AngeloMitchell Co. Board of Economic DevelopmentSan Angelo Chamber of CommerceSan Angelo Economic Development CouncilSnyder ISDSweetwater Enterprise for Economic DevelopmentWorkforce Solutions of West Central Texas Board

The West Texas Energy Consortium would also like to thank the Permian Basin Workforce Development Board for their support and participation.


THE WEST TEXAS ENERGY CONSORTIUM (“CONSORTIUM”

OR WTXEC) IS AN OPEN FORUM FOR COORDINATION AND

INFORMATION SHARING, ORGANIZED BY THE

WORKFORCE SOLUTIONS BOARDS IN CONCHO VALLEY,

WEST CENTRAL TEXAS, AND PERMIAN BASIN REGIONS.

ECONOMIC IMPACT OF OIL AND GAS

ACTIVITIES IN THE WEST TEXASENERGY CONSORTIUM REGION

2014

For More Information Please Visit Our Websiteccbr.iedtexas.org

This report was prepared by the Center for Community and Business Research at The University of Texas of San Antonio’s Institute for Economic Development. The project was supported with funding from the West Texas Energy Consortium. Any findings, conclusions, or opinions are those of the authors and not necessarily those reflected by The University of Texas at San Antonio or the West Texas Energy Consortium.

Principal investigator: Thomas Tunstall, PhD; Lead Investigator: Javier Oyakawa, M.A., MSc.Researchers: Vincent Loeffelholz, Gina Conti, Hector Torres, Ricardo Avalos,Jason Hernandez, Binbin Wang, John Rodriguez, Neeraj Ravi, and Feihua Teng.GIS specialist: Hisham Eid

2 UTSA Institute for Economic Development Center for Community and Business Reseach 35

economic impact of oil and gas - activities in the west texas

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