Ten West Texas counties in the heart of the Permian Basin will produce $20.5 billion in economic output in 2022 -- eight years from now -- according to the University of Texas at San Antonio (UTSA) Institute for Economic Development.
The institute's latest study of the region looked at Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry and Sterling counties and found that, driven by oil and gas, in 2022 the region will support 30,540 full-time jobs generating $1.8 billion in salaries and benefits for workers. The gross regional product for the 10-county area is projected to be $9.4 billion.
UTSA Economic Development Research Director Thomas Tunstall predicts that the region will gain $701 million in state revenue, including $334 million in severance taxes and $664 million in local government revenue, thanks to oil and gas industry activity.
"Our research indicates that while Howard County and the Big Spring area are still expected to have the largest economic impact, Reagan and Irion counties are expected to see significant increases in gross output between 2012 and 2022," he said.
For 2012, the 10 counties studied were estimated to have total impacts of close to $14.5 billion while supporting 21,450 full-time-equivalent jobs and generating revenues of $446 million for local governments and $472 for state government.
According to data for 2012, the counties out of the 10, that were most affected by oil and gas activity were Howard ($4.2 billion of economic impact), Martin ($2.9 billion) and Scurry ($1.9 billion). "Projections of 2022 impacts show Howard County having the most total output ($4.5 billion)," the study found. "Reagan County follows with the second most output ($4.4 billion), and Irion [is in] third place ($3.2 billion). Fisher and Sterling counties appear to be affected the least among the 10 counties in 2012 and 2022."
The study reported the growth and impact that the oil and natural gas industry has on residents and decision-makers in the West Texas region. Although the Permian's renaissance may still be considered recent, the scope and breadth of its impact is very large, and tangible effects on the region will be felt for years to come, according to UTSA.
According to data from the Railroad Commission of Texas, the 10 counties in the study accounted for roughly 27% of total Permian production in 2013, with the Permian being defined as districts 7C, 8, and 8A (see chart). Moreover, these 10 counties tend to be a bit oilier than the overall Permian, with crude oil and condensates comprising 67.5% of total production within the 10, versus 64.9% for the Permian overall.