Editor’s Note: This is the first in a series looking at the “Economic Impact of the Permian Basin Oil and Gas Industry,” a study released Thursday by Texas Tech University and the Permian Basin Petroleum Association.
LUBBOCK — It’s not a secret that the oil and gas industry has an impact on Midland County and the Permian Basin. But on Thursday, Texas Tech University released a study which attached figures to that impact.
— A $42 billion economic impact in Midland County.
— $137 billion in economic output generated in the 46 counties of the Permian Basin in 2012.
— More than 546,000 jobs sustained in the Permian Basin.
— The largest rig count of any region in the world (469 as of Dec. 27, 2013)
In a report full of “off-the-chart” statistics on the 2013 impact of oil and gas inside the oil patch, Texas Tech professors, researchers and contributors noted not only the oil and gas industry’s dominance, but the opportunity for sustainable growth for the region and a more stable economy than has been experienced in the past, as well.
“This (report) will open a lot of eyes to the actual impact,” said Ben Shepperd, president of the Permian Basin Petroleum Association. “It is off the charts and growing.”
Texas Tech University prepared the report for the PBPA. Shepperd said that, while people in the industry hear the “continual drumbeat of national and statewide totals,” he was not familiar with any study that focused on the “Permian” — the oil-producing region he called the “granddaddy.” This report, he said, will help tell what the Permian Basin means to Texas and the nation.
Just in Texas alone, the regional oil and gas industry contributed more than $60.2 billion to the gross state product. The Permian Basin also was home to 56 percent of the rigs in Texas — 27 percent of the total rigs in the U.S., according to the report.
“Part of our challenge is telling our story, the jobs out here,” Shepperd said. “Most members of the Texas Legislature don’t live in West Texas. It is up to us to tell the positive oil and gas story that exists.”
Bradley Ewing, a professor of Energy Economics at Tech’s Rawls College of Business, said the report solidified the Permian Basin’s importance in the global economy. The report said the Permian Basin was home to 14 percent of the world’s rigs.
“Going forward, we have the idea that this is big,” Ewing said. “The other parts of the world, they will learn what is driving the growth and sustainability.”
The report states that crude oil production in the Basin is around 1.4 million barrels a day, an increase from 2005 when 253 million total barrels were produced. The report also says technology and other factors are in place to make this surge in productivity different than those in previous decades. Ewing said the potential for sustainability exists for a couple of decades, at least.
Shepperd cited the Energy Information Agency when he said it appears that the production and revenue growth in 2014 will be “25 percent higher” than 2013.
“Those are huge numbers,” he said.
Some Midlanders might think a study wasn’t needed to illustrate the impact. Sales tax numbers, home prices and workforce populations are at an all-time high, while unemployment rates are among the lowest in the nation. The report showed no county felt the impact of the oil and gas industry more than Midland. Almost $11 billion in total labor income and more than $42.8 billion in total impact put Midland in a league of its own. Ector County was second in impact ($17.6 billion), Lea County, New Mexico, was third ($11.1 billion). Midland, Ector and Lea were also the top three when it came to employment.
“This economic impact has legs to it,” Shepperd said. “Because of technological advances, we can expect the level of activity to continue. I think there is truth to it lasting for decades to come.”
Permian Basin $137.78 billion
Permian Basin (Texas only) $113.62 billion
Midland $42.77 billion
Ector $17.64 billion
Lea, New Mexico $11.16 billion
Eddy, New Mexico $8.79 billion
Tom Green $6.5 billion
Others of interest
Hockley: $5.13 billion
Howard $2.69 billion
Andrews $2.52 billion
Lubbock $3.42 billion
Scurry $2.52 billion
Ward $2.32 billion
Yoakum $2.05 billion
Pecos $1.72 billion
Gaines $1.50 billion
Winkler $1.33 billion
Upton $1.06 billion
Reagan $802 million
Martin $211 million
Glasscock $69 million
Employment – Total Permian Basin
Lea, New Mexico, 49,798
Eddy, New Mexico, 31,716
Tom Green 22,329
Others of interest