Alex Mills
By Alex Mills
Environmentalists do not like fossil fuels. They say fossil fuels (oil, natural gas and coal) stink and cause global warming. They allege that hydraulic fracturing, which is used to produce crude oil and natural gas, causes pollution of groundwater and even earthquakes.
However, the environmental community is short on facts and long on supposition.
One fact they find very difficult to counter is that the increase in oil and gas production in the U.S. has transformed many areas that had been stuck in poverty for decades into an economic wonderland.
Farmers and ranchers in south and west Texas have tried for decades to scrape out of living for their families with little rain and a lot of prayer.
The change is not limited to Texas. Many people in North Dakota, Wyoming, West Virginia, Pennsylvania and elsewhere are now living a life where they do not have to worry about the next meal thanks to the riches of owning oil and gas mineral rights. That is because the framers of the Constitution of the United States decided that individuals – not the government – would be the primary owner of minerals.
…the environmental community is short on facts and long on supposition.
The University of Texas at San Antonio’s Institute for Economic Development recently studied the 10 county area of the Permian Basin and found that for 2012 the oil and gas industry had an estimated impact close to $14.5 billion, supported 21,450 full-time-equivalent (FTE) jobs, generated revenues of $446 million for the local governments and $472 million for the state government.
UTSA projects that the total impact of oil and gas industry activity in the 10 counties in 2022 to be “more than $20 billion in the moderate scenario, with 30,540 jobs anticipated, and revenues of $664 million for the local governments and $701 million for the state government.”
UTSA conducted a similar study of the economic impact of the oil and gas industry in the Eagle Ford Shale of south Texas.
Estimates of overall economic impact for the 21 counties (15 core and 6 neighboring counties) in the Eagle Ford in 2013 topped $87 billion, up from $61 billion in 2012. And the 21-county impact is expected to be $137 million by 2022. The Eagle Ford continues to exceed expectations in all categories.
For 2013, full time employment – direct, indirect and induced- is listed at 154,984. Payroll is an astounding $5,639,684,182.
Statewide the numbers are even more impressive.
Economist James LeBas testified recently before the Texas House Energy Resources Committee that the oil and gas industry had 414,000 employees at an average wage of $120,257.
LeBas said that an additional 570,000 people receive royalties from oil and gas production with an annual royal income of $11.5 billion.
LeBas noted that in 2010 that the oil and gas industry paid $7.4 billion directly to state and local governments in taxes. Tax receipt almost doubled in 2013 to $13.6 billion. The oil and gas industry pays property taxes, oil and gas production taxes (or severance taxes),sales taxes, franchise and other taxes and royalties to state funds.
LeBas noted that the Texas Petro Index, a composit of economic indicators, has set new records each month in 2014 rising more than 20 points to 308.4.
Texas has been blessed with abundant natural resources, and the citizens of Texas have benefited.
Alex Mills is President of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
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