If you work in one of the 23 counties comprising the Eagle Ford Shale region of South Texas, today -- or any day, for that matter -- would be a good day to ask your boss for a raise.
It's no secret that drilling in the Eagle Ford Shale and related activities have been a boon to the South Texas economy. A recent analysis by the Federal Reserve Bank of Dallas quantified the drilling boom's effects.
Generally, the 23 Eagle Ford counties account for 2% of all Texas jobs, according to the authors of the paper "Oil Boom in Eagle Ford Shale Brings New Wealth to South Texas." However, since the beginning of 2010, there have been 15,773 net jobs created in the Eagle Ford counties, accounting for 6.9% of the state's net gain during the period.
Wages have grown markedly in the Eagle Ford counties, according to the authors. From first quarter 2010 to third quarter 2011, the area experienced an average annualized growth rate in weekly wages of 14.6%.
Drilling is making cash registers ring.
"For the five counties where the job growth rate has been the strongest -- McMullen, Dimmit, La Salle, Live Oak and Lee -- seasonally adjusted retail sales grew at an annual rate of 55.1%, or $100.9 million, from first quarter 2010 to third quarter 2011," the paper said. "For the entire 23-county area, seasonally adjusted retail sales increased at a 15.4% annual rate, or $580.7 million. During this period, comparable retail sales rose 7.2% in the U.S. and 6% in Texas."
The paper's authors said it is difficult to predict how energy drilling activity will change in the Eagle Ford area over the coming years, but if oil prices stay above $70/bbl, drilling activity in the area should remain strong. "The billions of dollars the large energy companies are committing to expand infrastructure for delivering hydrocarbons to the Texas Gulf Coast signal anticipation of strong production from this region for many years to come," the authors wrote.
Another study, by the Center for Community and Business Research at The University of Texas at San Antonio Institute for Economic Development, recently predicted a long run of prosperity for the Eagle Ford region (see Shale Daily, May 14).