Areas in south Texas are getting prepared for a boost of economic activity and wealth creation for decades to come. The Eagle Ford Shale formation curves across South Texas from Laredo to northeast of Austin. While the southern zone of shale produces mostly natural gas, the northern zone is mainly drilled for oil, and the central zone is being tapped for natural gas liquids such as propane, ethane, and butane. The higher concentration of oil makes investments more attractive in today’s pricing environment.
The Eagle Ford shale is one of the hottest North American shale fields. “The total number of recoverable reserves for the Eagle Ford shale is still unknown, but there are estimates that it could be as much as 7 to 10 billion barrels,” said Thomas Tunstall, lead author of a recent study funded by America’s Natural Gas Alliance.
Eagle Ford is noted as being one of of the largest on-shore oil reserves ever discovered in the lower 48 states. The demand for drilling will lead drilling companies to develop certain areas faster and slower as the demand for certain fuels come at different times. If prices sink for one type of fuel, drillers can concentrate on other fuels that have more favorable prices.
Prices are determining which of the 23 Eagle Ford counties are seeing the highest wage increases. “Counties located above natural gas liquids and oil deposits experienced more significant average weekly wage increases in 2011 than other Eagle Ford counties,” states the Gas Alliance report. The Eagle Ford Shale has paid $3.1 billion in salaries and benefits to workers, $120.4 million in severance taxes, and led to triple-digit sales tax revenue growth in local counties.
Increasing supply will enhance energy security and industry development will contribute to lower energy prices in the future. By allowing these consumer and business resources to be expended in more productive ways, lower prices will in turn contribute to economic expansion. Exploration and production involve huge capital investments, thousands of jobs, and millions in royalty payments.
The development of shale gas plays are a huge gain for the state of Texas and the economy. The future holds many new opportunities and more doors to open in the shale gas industry.