The Eagle Ford play is potentially the biggest ever economic boost to South Texas. And, the crude oil play could potentially be one of the largest United States’ oil discoveries of the past 40 years. Estimates are that the yield of oil and natural gas liquids could be as high as 25 billion barrels. In sum, this spells big changes in a region that has had fairly stationary growth for decades – including the perennially low growth in almost all the 66 school districts of that 21-county area.
The Eagle Ford Shale exists across a wide swath of Central and South Texas. Its easternmost reach is in Leon County and it extends all the way west to the Texas-Mexico border in Webb and Maverick Counties. As of now, the majority of the activity has been in the western sections of the play, starting in Gonzales and Lavaca Counties and moving westward to the border with Mexico.
The area is sparsely populated, with many ranches and few towns. However, changes are already being seen in small towns such as Tilden, Cotulla, and Three Rivers. Landowners are collecting on leases that range from $200 to $8,000 an acre. That money will be spent on ranch and land improvements, and will make its way into the local tax offices, which in turn will lead to school and hospital improvements and other new localized infrastructure.
There are questions as to whether or not the area will see the same boom as was produced by the Barnett Shale in the Fort Worth area. However, South Texas does not have the same existing large-city infrastructure, and the population is much more dispersed than is the Fort Worth region.
The Eagle Ford‘s potential economic boom is more closely akin to decades earlier growth in the Permian Basin. Major cities — Midland and Odessa — in the were the epicenters of this earlier economic and population growth. By the early 1950’s, Midland had 215 oil companies and was fast becoming the economic center of this diverse oil-bearing region. In mid-1949, for example, there were 3,686 students enrolled in Midland I.S.D., but there were 14,647 enrolled by the Fall of 1959 – a three-fold increase in 10 years.
So, by 1959, Midland I.S.D. had gained 12 new elementary schools built, 3 new junior high schools, 1 junior/senior high, and additions to 14 other school buildings. Between 1960 and 1970, the oil industry slumped – due to foreign oilfields – and students showed a small decline in Midland. But, between 1980 and 1983, the overall Midland population increased by roughly 30% — in 3 years…with lower, but still significant, increases in students. This roller-coaster ride of growth and decline is common in oil-dependent regions.
Back to the Future: according to Texas Railroad Commissioner David Porter, “The Eagle Ford Shale has the potential to be the single most significant economic development in our state’s history.”1 There are currently 13,000 full-time jobs – summing to over $500 million in salaries. A U.T. San Antonio study projects that number to increase to 70,000 workers by 2020.
Oil field services companies such as Halliburton Co., Petrohawk Energy Corp. and Frac Tech Services are hiring workers currently in small towns throughout the play. Tilden, Cuero, Alice, Laredo, Pleasanton and Caldwell are all seeing an increase in skilled worker positions that have been a rarity in the past.
Currently there is a shortage of housing for workers moving into the area. Investors such as Remote Logistics International are just starting to build in the area. Restaurants and convenience stores are booming in the area, and as the play continues to develop, there will be need of more retail, restaurants and other amenities if those workers are going to be enticed to stay in the area.
As the closest large city to the Eagle Ford Shale, San Antonio is also expected to have positive growth as a result of the drilling to the south. According to The Houston Chronicle, San Antonio is “poised to become a mini-hub for energy”2 since companies will need to open offices to supervise their drilling efforts in South Texas. In fact, Keith Phillips, senior economist at the San Antonio branch of the Dallas Federal Reserve estimates that the San Antonio could add as many as 4,200 jobs due solely to Eagle Ford Shale drilling. Sanjel has already become the City of Cibolo’s largest employer. So, the San Antonio school districts, such as Schertz-Cibolo I.S.D. and others on that southeast side of Bexar county should see significant growth.
It seems inevitable that there will be commercial development, followed by student growth, in the smaller towns and school districts in South Texas. School districts closest to the epicenter of drilling permits include the smaller districts of Three Rivers I.S.D., Karnes City I.S.D., and Yorktown I.S.D.
Yet, those districts with the largest current student populations may be the highest attractors of additional students – such as United I.S.D. with almost 42,000 students (and now targeted for the liquids-rich nature of the Eagle Ford formation in the northern part of Webb County), and Eagle Pass I.S.D. with almost 15,000 students (where light crude and condensate is produced and also the location of the 106,000 acre Harrison Ranch – the largest single lease in the Shale).
The level and extent of that student growth remains to be seen. What is undeniable is that the Eagle Ford Shale discovery and its development will be an incredible employment, housing, and population boom for the southern, and some central, portions of the State, at a time when it is sorely needed.