The Eagle Ford shale drilling boom has boosted wages and job growth, and the increased drilling in 23 South Texas counties will likely have a continued impact on the state, according to a new report by the Federal Reserve Bank of Dallas.
According to the report released this week, the drilling boom has increased wages by more than 14 percent, job growth rose by nearly 6 percent and retail sales jumped 9.3 percent in 23 South Texas counties.
Live Oak and McMullen counties, which sit directly above natural gas liquids and oil deposits, benefited the most from the drilling boom, according to the study.
Live Oak saw wages rise 35.8 percent, from $585 to $823 from the first quarter of 2010 to the third quarter of 2011. McMullen County saw a similar jump as wages rose from $635 to $890, a rise of 25 percent, during the same period.
Nationally, wages rose 6.3 percent, from $870 to $953.
Drilling operations in South Texas also has meant strong job growth. From the first quarter of 2010 to the third quarter of 2011, jobs grew 5.9 percent, reaching 2.9 percent above the previous high in those 23 counties.
“While recent activity is impressive, more growth may lie ahead to meet demand,” the report found. “The scale of development has surpassed the capacity of local industry. … As the Eagle Ford matures and the local service industry expands, many outside workers may become local residents and employees.”
The report found the impact has an direct impact far away from the oil fields.
Dallas, Houston and San Antonio are seeing benefits from the $14.6 billion spent in 2011 on drilling expenditures. The report said the bulk of projects costs are from geologists, geophysicists and other personnel who work at company headquarters.
Natural gas, petrochemical and oil facilities in those cities are also seeing a benefit from the drilling boom in South Texas.
Energy companies are committing billions of dollars to expand and build new infrastructure for delivering and processing the natural gas, crude oil and condensates.
The report said that’s a clear indication that drilling isn’t likely to slow – unless oil prices drop.
“As long as oil prices stay above $70, drilling activity probably will remain strong; at less than $70, drilling activity likely would begin falling off,” the report found.