Economic Impact of Eagle Ford Shale in Maverick County Forum Held
By: Jose G. Landa©
Local city and county officials, public dignitaries, educators, business representatives, and many other community members attended the Eagle Ford Shale Economic Impact in Maverick County Forum held on Monday, November 18, 2013 at the Sul Ross State University-Rio Grande College, Small Business Development Center, located at 1439 Bob Rogers Drive in Eagle Pass, Texas.
Among the keynote speakers were State Senator Carlos I. Uresti, State Representative Poncho Nevarez, and Dr. Tom Tunstsall, Research Director at the UTSA Institute of Economic Development. Serving on the roundtable discussion forum was Eagle Pass Mayor Ramsey English Cantu, Eagle Pass City Manager Gloria Barrientos, Raul Perez, Executive Director of the Maverick County Development Corporation, Jose Ceballos of American Natural Gas and Betty Sifuentes of the Eagle Ford Consortium.
Among the important issues addressed during the forum were the importance of preparedness, diversification, technical advancements in education related to the ongoing and future demand of oil industry workers, funding for infrastructure needs and how communities not directly impacted by the oil industry must assure, readiness to fully take advantage of the opportunities, present and in the horizon via the Eagle Ford and Permian Shale plays.
State Senator Carlos Uresti spoke to the attendees stating that the unprecedented oil boom that is happening in the front and backyard of his district has become a top priority on his legislative agenda.
“In my district alone there are over 34,000 oil and natural gas producing wells, and if predictions hold true we are just getting started,” said Senator Uresti.
Senator Uresti added that by next year the United States is projected to become the ninth largest oil producer in the world.
“The oil boom is having an impact far beyond the regions that it contains. This massive production has led the nation’s output of oil to surpass the import of oil into the nation for the first time in 18 years, according to the energy information administration,” said Senator Uresti.
Although most of the drilling activity is occurring in counties East of Maverick County, Uresti expressed that it does not mean that Maverick County could not benefit from the oil bonanza.
“Just as San Antonio and Corpus Christi are serving as gateways to the Eagle Ford Shale in supplying the needs of the industry, Eagle Pass is a regional business center that should take advantage of the golden opportunities that will present themselves,” added Senator Uresti.
Uresti stated that if Mexico opens up its oil plays to United States investors, Eagle Pass could become the gateway for oil and gas expansion into the Mexico petroleum industry.
“To be ready for these opportunities we must assure that our schools and businesses are prepared to supply what the industry needs. That means that we must continue to work together to sustain the oil industry’s promise, while meeting its environmental and social challenges as well. Here in Eagle Pass the sales tax figures have increased and the unemployment rate has seen a decline but we have so much work to do,” said Senator Uresti.
“The shale has brought many challenges as well, housing shortages, pollution, a spike in crime and increased traffic in some of the other counties. We are here to learn more about the Eagle Ford’s impact, specifically on Eagle Pass. The oil boom is changing Texas mostly for the better. Many communities are thriving like never before. But we must remember that the change must be nurtured, we must continue to work together to sustain the promise of the shale. Everyone has a role to play; local officials, state legislators, the business community, educators and even individual citizens. The energy industry cannot be maintained without proper roads, prepared workers, a secure supply of water and sound policies in place, but most certainly it cannot be maintained without the thoughtful commitment of this community,” concluded Senator Uresti.
State Representative, Poncho Nevarez also spoke at the forum, emphasizing the importance of looking at the nuts and bolts of the economic impact of the oil boom and breaking it down from the bottom up to better understand what is needed by the industry and what a county like Maverick can offer.
“We need to take care of our school districts because these companies want to employ people that know what they are doing, they want people that are educated technically, that have some skills beyond a high school certificate. For example, in Del Rio and also in Eagle Pass the technical programs are great and you begin to see the investment from the bottom up,” said Representative Nevarez.
Representative Nevarez also strongly urged that preparedness for the future of oil exploration south of the border in Mexico was important for Eagle Pass to capitalize on the Eagle Ford Shale Play.
“It needs to start from the bottom up,” concluded Representative Nevarez.
Dr. Tom Tunstall proceeded to present the findings of his research of the Eagle Ford Shale and its impact to the area and the State of Texas.
Dr. Tunstall’s presentation covered economic research and impacts and development of the Eagle Ford Shale Play.
“Our research is intended to be actionable and useable by all, including policy makers,” said Dr. Tunstall.
Dr. Tunstall stated that the Eagle Ford Shale extends into Mexico and to the Gulf Coast. At the present time oil and gas production literally stops at the U.S./Mexico border.
“Mexico is looking into reforming their energy sector. Over time, we certainly expect for them to tap into the Eagle Ford Shale,” added Dr. Tunstall.
The study looked into 14 counties including Maverick County that have active oil production.
Six of these counties do not have much production, if any, but are seeing a lot of economic impact because of the shale play and their approach and readiness.
“What is being seen are a lot of operational facilities, pipeline productivity, significant manufacturing, refining process facilities which are being built in and around the shale play including a lot of rail infrastructure,” said Dr. Tunstall.
In 2012, there were over 4,300 oil and gas drilling permits issued by the Railroad Commission of Texas, resulting in 3,000 completed wells. This year the numbers could reach the same amount by the end of the year. In 2012 there was 400,000 barrels being produced per day while this year it has increased to 600,000 barrels per day.
Currently natural gas activity remains flat due to record low prices for natural gas.
“Texas is now producing more oil than it has in over 30 years,” said Dr. Tunstall.
“The Texas Rainy Day Fund has seen significant growth largely because of the plays including the Eagle Ford Shale. By 2022, we expect for the activity in the Eagle Ford to reach $90 billion dollars and support over 128,000 full time jobs, increasing state and local revenues significantly as well,” added Dr. Tunstall.
Dr. Tunstall went into detail on the collection of taxes by county and how many of these counties were experiencing issues on how to balance the necessities being seen due to infrastructure decay and other issues being experienced due to the oil industry.
“In addition to the production counties as well as adjacent counties, there is over $100 billion dollars of economic impact being seen in supporting roles to the oil industry,” added Dr. Tunstall.
Dr. Tunstall further stated that ramping up educational programs along the universities in South Texas was also crucial to addressing the labor needs in the Eagle Ford Shale.
Diversification will be important for a lot of the communities like Maverick County to move forward into the future including higher margin agriculture products, recreation, hunting, tourism, geo-thermal opportunities, and water distillation facilities are needed to take full advantage of the opportunity.
Dr. Tunstall also touched on the importance of developing a skilled workforce and pointed out the importance of setting foundations to better provide adequate infrastructure such as better roadways, medical facilities, broadband networks, K12 educational programs, and things that would help in attracting other type of industries to the region.
Dr. Tunstall also pointed that one of the key components for diversification was quality of life components such as airports, water reservoirs, revitalizing downtown areas, and creating attractive public places.
After Dr. Tunstall’s presentation, the forum was opened to questions and discussion.
Eagle Pass City Manager Gloria Barrientos stated that the City of Eagle Pass looks forward to the positive impacts that can be brought into the community, but what the city is also looking at the things it needs to prepare for so that it does not have a negative impact.
Mayor Ramsey E. Cantu stated it is truly great to see the community come together to see how we can better serve our citizens and take advantage of these opportunities.
“The City of Eagle Pass is taking on a very strong initiative of tax abatements to entice new investors that can see Eagle Pass as one of the better hubs for this region. We are processing and planning for the potential growth that is to come,” said Mayor Cantu.
Betty Sifuentes of the Eagle Ford Consortium emphasized that when they undertook the formation of the consortium in 2010 it was to identify and develop the career pathways to have an available and skilled workforce to meet the demands of the industry.
Raul Perez, Executive Director of the Maverick County Development Corporation, stated that at the present time the MCDC is projecting a lot of activity in the immediate future in the Eagle Pass-Mexico border as a lot of companies will start to see Eagle Pass as a hub to do business into Mexico once they begin to tap into the Eagle Ford Shale Play on that side of the border.
A member of the audience then asked if there was a projected date that the productivity in Mexico would start.
Perez stated that Mexico is in the process of an ongoing study including the evaluation prospects and identification of resources and this first phase will take over 3 years to complete.
The consensus of the forum participants was that although Maverick County has not had a significant economic impact yet with the Eagle Ford Shale, the future is very bright and should prepare itself to capitalize on the Eagle Ford Shale, particularly with the impending Eagle Ford Shale play in northern Mexico along the U.S.-Mexico border in the immediate future and position itself as the gateway to U.S.-Mexico oil and gas development.
