Texas

Energy and Environment Reporting for Texas

A Tale of Two Counties: How Drilling Makes Some Flush With Cash

Fracking in Texas.

Photo by Flickr user www_ukberri_net

Fracking in Texas.

But for Those Outside the Boom, It’s Business as Usual

It’s been over four years since a drilling company first drilled for (and hit) oil and gas in the Eagle Ford Shale. Since then, the region has become an economic engine for Texas, and to some degree, the country.

While the region has seen several downsides to the current drilling boom, especially from traffic, accidents and water demands, a look at what the boom has done for coffers in the region shows just how rapidly things have changed.

Drillers have permitted over 10,000 wells, spending billions to get to the oil and gas. Over half a million barrels of oil are now being produced each day, supporting over a hundred thousand jobs.

A Closer Look at Economic Impact

StateImpact Texas recently analyzed data from the State Comptroller’s Office, which records the sales tax allocation history for most of Texas’ cities and counties. The more sales tax a municipality collects, the more goods and services it has sold. The results painted a vivid picture of just how much money is flowing through the Eagle Ford region.

StateImpact looked at sales tax records from 2008 to 2012 for five counties in the Eagle Ford region: Karnes, Atascosa, Gonzales, Live Oak, and Dimmit. We chose these counties because of the Eagle Ford’s significance to their economies, as well as data availability.

Map showing each of the five counties.

Map by Michael Marks

Map showing each of the five counties.

In 2008, the five counties collected an average of nearly $650,000 in sales taxes. But just four years after drilling started, the yearly average for those same counties jumped to over $5.8 million.

The five counties' sales tax revenue growth from 2008 to 2012.

Graph by Michael Marks

The five counties' sales tax revenue growth from 2008 to 2012.

The region’s growth is even more impressive when you compare it to other parts of the state.

Bandera County is about 50 miles north of some of the Eagle Ford’s most prolific drilling. With a population of 20,485, it is comparable in size to the five counties included in the graph above (whose populations average about 20,214 people). This next graph shows Bandera county’s sales tax revenue compared with the five selected Eagle Ford counties over the same period:

Eagle Ford counties and Bandera county sales tax revenues.

Graph by Michael Marks

Eagle Ford counties and Bandera county sales tax revenues.

Sales tax revenues in Bandera County have held steady at around $450,000 per year, while 50 miles south, the fracking boom has caused spending to swell exponentially.

People are spending lots of money in the Eagle Ford region, and that doesn’t look like it will stop any time soon.

Although every boom eventually busts, some experts project that production could continue for the next 20 to 30 years. That means more fracking, more spending, and potentially more growth in South Texas.

 

Michael Marks is a reporting intern with StateImpact Texas.

Comments

  • TXsharon

    Can you explain why, when I drive through Karnes City, for example, there is nothing but poor people and a run-down town? Out on some of the country roads, which are in horrible shape, there are some new houses that frack built. But these towns do not look like places that are prospering.

    • Jason Clayton

      The poor people you are seeing must not own any minerals. Life’s not always fair, but if those poor people are willing to learn there are plenty of oilfield jobs out there, some that require nothing more than a high school diploma/GED and a CDL.

      • TXsharon

        The whole town is made up of poor people. I was in Karnes visiting with a man who had one of those jobs in the oilfield. Now he is too sick from exposure to all the toxins and he can’t pass the physical so his CDL is worthless.

    • John

      One reason Karnes City still looks poor and ‘run-down’ is because this oil boom is so new. 5 years is not a lot of time for a city to make improvements. And how does a small town make long range plans around this boom? It is almost impossible when fracking is vilified at every turn. And without fracking, there is no boom. No increased sales tax revenue. No land leases, no royalty checks, no new jobs….

      You drove through the town and the surrounding countryside? That’s real big of you. Did you get out of your vehicle and actually talk to the local business owners, their employees? The land owners that drive those ‘horrible’ country roads? I see from your website you are against fracking and oil exploration. You came to the Eagle Ford with a negative view and you saw exactly what you expected.

      I farm and ranch in Gonzales County. I welcome this boom with all the benefits and problems.

      • TXsharon

        Our report on impacts in Karnes will be out later this month so you can bet that I have talked to locals. In fact, the called me for help and asked me to come. I’ve been there several times.

        While I was there a couple of weeks ago, I met a camera crew. We were standing on a county road taking pictures of a rig. They don’t like it when people take pictures so they sent a waste hauler truck to spray down the road with drilling waste. Keeps down the dust, don’t cha know. I did get a sample of that and it smelled like petrochemicals and pesticides. It’s at the lab right now.

        I’m a 5th generation Texas landowner and a mineral owner. I had a beautiful place in Wise County where fracking and horozontal drilling were first “married” in 2002. Eventually I couldn’t live there. So, yes, I have a negative view that comes from my direct experience of living with this for years.

        But I saw way more than whatt I expected in the Eagle Ford. Way more.

      • TXsharon

        Also, I wasn’t taking about the town’s infrastructure in my comment. I was talking about the people who live in the town. I’ve been going to Karnes for over a year now and I’ve seen no improvements for the people who live there. Sure, some of the big landowners are building nice rock homes but the overall population has not improved their living conditions.

  • Judge Daryl Fowler

    According to Texas Property Tax Code Chapter 26, the increase in sales tax collections is used as a revenue offset and forces the local property tax revenue down by a like amount. The Code essentially places a revenue governor on the county government at the same time it needs additional millions to pay for the road damages caused by the unconventional and unprecedented amount of drilling activity. Therefore, it is difficult to enjoy any prosperity. With the exception of HB 1025 (83R) and SB 1747 (83R), there has not been any help to mitigate the expense of repairing the road damage while at the same time the state has reaped as much as $200 million in the last 12 months from the production tax generated in Karnes County alone. The production tax funds the so-called Rainy Day Fund.

    • TXsharon

      DeWitt county alone needs $432 million dollars for road repair and maintenance. he Texas Comptroller states that the entire severance tax revenue for all 24 counties of the Eagle Ford amounts to only $323 million. http://energypolicyforum.org/2013/06/03/will-the-eagle-ford-shale-bankrupt-local-communities-part-2/

      No one is getting rich off this but the oil & gas company executives and a few large landowners. Plus according to a new Harvard study, the Eagle Ford Shale wells decline so fast they will need to drill 90 new wells per month just to keep production even. Where will we grow food? Where will we get the water? This is a disaster!

  • Inform Environmental

    This issue of hydraulic fracturing is a highly contentious one. Everyone has an opinion but there is very little data out there to support such opinion, one way or the other. Currently, I am a lead scientist on a UT-Arlington research team that has measured groundwater quality as a function of HF in both the Barnett and Cline shales. If any one would like to get their water tested for mineral and metals, biotoxicity or chemicals known to be used in the process of natural gas extraction, would be more than happy to provide these analyses. Also, if any one has questions about the findings of our previous experiments, I would love to provide as much insight as possible. Again this issue is extremely important and we just want to provide information to the public so that they can decide for themselves.

  • Mario

    What will happen when all the drinking water is damaged? Who will pay and provide water for all the residence in the area? Who will pay for all the doctor bills when the population starts to get sick?

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