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Study Gives Nod to Pipelines for Texas Energy Boom

Oil and gas producers are often thanked for their contribution to the economy of the Lone Star state; however, they couldn't do it without the midstream sector. Last year the oil and gas pipeline industry had a $33 billion impact on the Texas economy, according to a new study.

The Texas Pipeline Association (TPA) commissioned the study by researchers at Texas Tech University. It found that last year the state's pipeline industry supported more than 165,000 "high-paying" jobs, contributed $18.7 billion in gross state product, and injected $1.6 billion in state and local government revenues.

The study includes a comprehensive overview of the various oil and gas plays in Texas as well as the midstream infrastructure and its capacities in place to carry the production to market.

"Due to improved technology in horizontal drilling and multi-stage hydraulic fracturing, well productivity has increased dramatically since 2011 and has led to the current state of heightened production, which has contributed substantial economic benefits to the state," the researchers said. "It is important to note, however, that the realization of these benefits depends on a pipeline transportation system that will continue to play a vital role in the future development of the Texas economy."

According to the Texas Tech researchers:

  • "Conservative economic estimates" conclude that from 2014 to 2024, the pipeline industry will contribute more than $374 billion in total economic output, sustain 171,000 high-paying jobs annually, contribute more than $212 billion in additional gross state product, and inject $19.5 billion in state and local government revenues.
  • Wells in a confirmed shale play exhibit a repeatable, statistical distribution offering predictable performance in a given geological subset.
  • The state of Texas has the highest rig count of any U.S. state or world region (48% of the total rigs running in the U.S. and 25% of the total world rig count).

"The pipeline industry verifiably underpins the exploration and production industry and its impact on state funds is not only substantially measurable but growing in scale," said Bradley Ewing, Texas Tech University professor of energy economics.

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