Eagle Ford Boasts Billions in Benefits – Stresses Infrastructure

The Eagle Ford Shale is providing billions in benefits to South Texas, but not without stressing South Texas infrastructure.  Eagle Ford drilling has eclipsed 200 rigs and the entire region has 264 rigs working.  That’s roughly 14% of all active onshore rigs in the U.S. To put that in perspective, we had less than 20 rigs active in the play two years ago.

With 100s of rigs active, billions of dollars are flooding into the region. In one of the most active areas, Karnes County’s tax roll has increased from $500 million to $1.3 billion in a few short years.  Alice, TX, a town that isn’t actually atop the shale, has far exceeded tax revenue estimates in 2011 and will likely be making improvements around the city without borrowing a dime. Add thousands of Eagle Ford jobs with royalties that are beginning to roll in and you’ve got an economic boom.

Along with all of the positives, streets weren’t built for the amount of traffic running the roads these days. All those vehicles mean more people and people need places to live. Who could have guessed we’d have an Eagle Ford housing problem. There simply aren’t enough beds for the number of oilfield employees who have moved to South Texas. 15+ RV parks will open in Bee County, TX, in 2011 alone.  That’s hundreds of RV pads to provide temporary relief, and there’s no doubt permanent housing will be needed as well.

Heavy trucks are damaging roads, kicking up dust and creating traffic where traffic never existed. Hotels and rental properties are full to bursting; new RV parks are dotting the landscape. “We have a lot of RV parks coming,” Karnes County Judge Barbara Shaw said. “We’re talking hundreds and hundreds of RV slots.”

So instead of spending à la The Beverly Hillbillies on swimming pools and movie stars, much of the new tax money will go to mundane things, such as roadwork. Even school district budgets are evolving with the oil play.

In Yoakum, population 5,441, school superintendent Tom Kelley recently discovered his district will be considered rich when a gas processing plant is completed next year in his area. For the first time, Yoakum will be a “Robin Hood” district that must share its wealth with a poorer school one.

Read a full write up at the chron.com

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Kenneth E. DuBose

Kenneth E. DuBose

Kenneth DuBose is the past President of Cheyenne Minerals Inc., an independent oil and gas operator. He began his energy industry career with ARCO Oil & Gas. Mr. DuBose then directed development of natural gas storage projects with Tejas Power Corp. He was a founding member of U.S. Minerals, (acquired by Torch Energy in 1999) a provider of internet based education for America’s mineral owners. Mr. DuBose holds a BS in Petroleum Engineering from Mississippi State University. He has served on various industry steering committees, non-profit boards, and is an active member of the Society of Petroleum Engineers, the National Association of Royalty Owners, the American Association of Professional Landmen, as well as being a Registered Investment Advisor. He writes on topics of oil and gas investing, wealth management and personal finance, having appeared in the Wall Street Journal, Kiplinger’s, Kiplinger’s Personal Finance, Houston Business Journal, Financial Advisor and various radio and TV outlets.

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