West Texas Oil, Gas Activity Economic Impact Could Reach $20.5B by 2022
The economic impact of oil and gas activity in West Texas will rise to $20.5 billion by 2022, supporting 30,500 full-time jobs and pay $1.8 billion in wages and salaries, according to a December 2013 report by the University of Texas at San Antonio’s (UTSA) Institute for Economic Development.
Oil and gas activity in plays such as the Cline shale and Wolfberry plays will generate $701 million in state revenues in 2022, including $334 million in severance taxes, creating close to $9.4 billion in gross regional product and contributing approximately $664 million in local government revenues.
Oil and gas activity in 2012 had an economic impact of nearly $14.5 billion in a 10-county area of West Texas, and supported nearly 21,450 full-time jobs and paid $1 billion in wages and salaries. The oil and gas industry also generated almost $472 million in state revenues in 2012 – including $187 million in severance taxes – and added approximately $6.2 billion in gross regional product, and contributed nearly $447 million in local government revenues.
The number of full-time jobs supported by the oil and gas industry in 2022 compared with 2012 represents a 42.2 percent increase, a rate of growth that almost doubles the estimated 21.7 percent growth in total employment in the area for the same period, the report noted.
The $20.5 billion estimate is one of three scenarios of the economic impact of oil and gas activity in West Texas. This economic impact could range from as low as $7.6 billion or as high as $34.3 billion, due to variances in oil and gas prices, future oil and gas activity, and changes in the number of wells per rig and productivity per well. Under the moderate scenario, nearly 3,800 horizontal wells are forecast to be drilled; the number of wells drilled could range from 1,930 to 5,900 under low and high estimate scenarios.
UTSA’s Institute for Economic Development conducted the research for the West Texas Energy Consortium (WTxEC), an open forum for coordination and information sharing by Workforce Solutions Boards in the Concho Valley, West Central Texas and the Permian Basin regions, to estimate the economic impacts of the oil and gas industry on certain counties in the consortium in 2012 and to create a forecast for the year 2022.
“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,” said Thomas Tunstall, research director at the UTSA Institute for Economic Development and principal investigator of the study, in a statement.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Senior Editor | Rigzone