Barnett Shale spurs new jobs and business growth
Posted on Feb 26, 2008 - 02:16 PM
By Ed Ireland
The booming energy business is creating thousands of new jobs and business opportunities across the Barnett Shale region, which covers 18 counties and 5,000 square miles in North Texas. The United States may be slipping into a recession, but the North Texas economy remains robust, in large part due to the natural gas drilling and related activity in the Barnett Shale.
This activity in the Barnett Shale area has already created an estimated 55,000-plus new jobs and will spur an additional 53,000 over the next 10 years, according to a 2007 economic study by The Perryman Group. What may come as a surprise, however, is where the new jobs are. They are not just in the oil and gas industry. In fact, the biggest growth area is in retail, which is estimated to see more than 15,000 new jobs over the next 10 years, thanks to all the Barnett Shale activity.
The second biggest growth area over the next decade is also surprising: restaurants and bars, with an estimated 8,000 new jobs. Third place is shared by the construction industry and the oil and gas industry, with about 3,200 new jobs estimated over the next 10 years.
What’s going on here? All the new cash injected into the region’s economy is fueling sales and job growth in virtually every industry, thanks to a phenomenon called “the multiplier effect”. The new dollars come from royalty payments to homeowners and local governments, wage increases in growing businesses and new salaries for all the new jobs being created.
For example, Tarrant County is estimated to have more than 1,000 landmen handling mineral rights leases for energy companies in Tarrant County, and at least that many scattered throughout the Barnett Shale region. Most of those jobs did not exist a few years ago. Law firms are seeing new clients for cases involving leasing and mineral rights. New hardware stores and restaurants are popping up all over to serve the new workers and activity on nearby drilling rigs.
So there is more money in the local economy to be spent on all sorts of things such as clothes, eating out, and new homes. But with the multiplier effect, every new dollar spent sets off a chain reaction. For example, as more clothes are purchased at the retail store, a storeowner needs to buy more clothes for a larger inventory and may need to buy more clothes racks and to hire new staff. These new employees spend part of their new salaries on lunch at a nearby café. With the cafe selling more lunches, it needs to hire more workers and buy more food. And on and on the multiplier effect ripples through the economy. Of course local governments and school districts also benefit since more sales mean more tax revenue and more tax revenue means new parks and schools. Even better news is that we are just at the beginning stage of all this economic growth. Drilling in the Barnett Shale is expected to continue for many years to come and each well is expected to produce natural gas for at least two or three decades and possibly longer. As horizontal drilling and water fracturing technologies improve, more gas will be produced from new and existing wells and the life of all wells will be extended.
The businesses that support the drilling and producing activity, such as equipment manufacturers and suppliers, engineering and geology firms and well service companies that have been headquartered in West Texas and South Texas for years, are arriving in force throughout the Barnett Shale region.
All and all, there is no question that gas drilling is a boon to the North Texas economy, bringing new jobs and business growth in all kinds of industries, not just the energy sector. We are fortunate to be living in an area that is somewhat insulated from any downturn in the national economy. Virtually everyone in the region stands to benefit in some way from the Barnett Shale for years to come.
Ed Ireland, Ph.D. is executive director of the Barnett Shale Energy Education Council, a consortium of eight of the leading energy companies operating in the Barnett Shale that are dedicated to promoting energy education and best practices as it relates to oil and gas leasing, drilling, production, transportation and marketing in the Barnett Shale. For more information, please visit www.bseec.org.
