Shale plays show how resource work helps economies

Bob Tippee
Editor

The economic goodness of resource development is, or should be, axiomatic.

With inputs of labor and capital, resources yield wealth, the generation of which creates jobs, incomes, and tax revenue for governments.

In towns surrounded by active oil and gas development, prosperity becomes manifest in no-vacancy signs aglow outside motels, new pickup trucks cruising streets, parking lots overflowing around steak houses.

For practical economic analysis, quantification is unnecessary. Who, besides the owner, needs sales figures from the convenience store? Most people can deduce what they need to know about business conditions from shelves empty by sundown every Friday in the beer cooler.

Still, numbers can be instructive for anyone squeamish about the drilling of holes and extraction of hydrocarbons.

A new report by the University of Texas at San Antonio Institute for Economic Development’s Center for Community and Business Research shows how the Eagle Ford shale play helps 24 Texas counties.

Last year, says the study, which was funded by America’s Natural Gas Alliance, Eagle Ford activity generated $2.9 billion in total revenue and supported 12,601 full-time jobs, yielding $511.8 million in salaries and benefits to workers.

The activity contributed $1.3 billion to gross state product, boosting state-government revenue by $61 million and local government revenue by $48 million.

In a similar study last year for the American Petroleum Institute, Timothy J. Considine of Natural Resources Economics Inc., Laramie, Wyo., estimated the Marcellus shale play in 2009 contributed $4.8 billion to gross regional product of West Virginia and Pennsylvania. Marcellus activity generated more than 57,357 jobs and local, state, and federal tax collections totaling $1.7 billion, Considine said.

In a country where 13.9 million people are looking for work and many states face insolvency, numbers like these deserve more attention than they receive in ludicrous discussions about the supposed need to limit shale drilling.

Nobody close to the action needs gee-whiz data to see that people in booming shale plays are working hard and eating steak. Most have places to stay.

(Online Feb. 25, 2011; author’s e-mail: bobt@ogjonline.com)

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