Ensuring The Future Of South Texas Communities - Op Ed

Omar Garcia STEER

With the 83rd Legislature in session, legislators have a unique opportunity to address county transportation infrastructure needs during this transformative time in South Texas. All eyes are on Texas -- and the Texas legislature as it develops solutions -- for good reason. Texas is known for our innovative platforms, our reinvestment methods and a collaborative spirit that is at the very core of being a Texan.

Cities and counties are forging strategic alliances pertaining to productive development of the Eagle Ford shale region; educational institutions from across the region are ramping up science, technology, engineering and mathematics (STEM) coursework to meet the growing needs of the industry; and communities are attracting increasing numbers of small businesses, new residents and visitors.

The Eagle Ford Is Bringing Economic Prosperity

South Texas is fortunate to be experiencing the benefits of expanded oil and gas activity, astutely described by Forbes as “the blessing that is the Eagle Ford Shale.” Access to bountiful natural resources in this region is truly a “blessing” whose impact will be pronounced for many generations of Texans. But with this opportunity comes a very real need to create and sustain critical infrastructure to meet the growing community and industry’s needs, including roads, housing, medical facilities and other basic necessities.

“Texas is in a favorable growth position as evidenced by the continually-developing Eagle Ford Shale region.”

STEER and its founding members -- Anadarko, Chesapeake Energy, ConocoPhillips, EOG Resources, Lewis Energy Group, Marathon Oil, Murphy Oil Corporation, Pioneer Natural Resources Company, Shell Oil Company, Statoil and Talisman Energy -- are committed to working with our South Texas leaders to identify and share solutions to support and enhance the vitality of the region. The STEER founding members invested more than $12 million in 2012 for a variety of infrastructure needs in South Texas. County officials are limited in their ability to raise funds necessary to repair and maintain impacted county roads. STEER will continue the dialogue with stakeholders in South Texas to assist with finding solutions that will ensure continued prosperity and economic development for the region.

STEER Will Collaborate With Local Communities

Texas is in a favorable growth position as evidenced by the continually-developing Eagle Ford Shale region. The timely release of the University of Texas at San Antonio’s Institute for Economic Development March 2013 report on the Economic Impact of the Eagle Ford Shale, states that the shale now ranks as the largest single oil and natural gas development in the world based on capital expenditures by companies in the industry. Wood Mackenzie Ltd. has calculated that the oil and natural gas operators active in the Eagle Ford Shale will spend $28 billion in 2013, up 68 percent from the $19 billion spent in 2012.

Collaboratively, STEER local community leaders, and state elected officials must work together to promote long-term investment and sustainability in South Texas. Infrastructure improvements and investments made today will pay off many times over, as unprecedented economic impact brings a renewed spirit into South Texas.

By Omar Garcia, President, STEER - South Texas Energy & Economic Roundtable

As President of the South Texas Energy & Economic Roundtable (STEER), Omar Garcia facilitates communication, education and public advocacy surrounding the production of energy resources in the Eagle Ford Shale Region and all of South Texas.

Key Energy Acquires Edge Oilfield and Summit Oilfield Services

Key Energy is increasing its shale oil exposure through the acquisition of Edge Oilfield Services and Summit Oilfield Services. The Key Energy deal follows Edge's entry into the Eagle Ford Shale where the company has expanded its offering. The two acquisitions put Key Energy in a position to further capitalize on the shale oil boom across the country.

"Oilfield services provider Key Energy Services Inc said it would buy Edge Oilfield Services and Summit Oilfield Services for about $300 million to add to its products used for drilling in unconventional shales.""The deal comes as oil and gas companies look to tap North American shale fields -- underground rock formation rich in oil and gas -- that require techniques like hydraulic fracturing to crack the resources."

"Edge's entry into the lucrative Eagle Ford shale is underway. This will boost Key Energy's revenue as many companies have been striking deals to expand in the oil-rich region."

Read the full news release at Reuters.com

Eagle Ford Shale Boom Books Hotels

Eagle Ford Shale Hotels and RV parks are booming. Citizens and business owners are all benefiting from the business created by the Eagle Ford Shale. Opening RV parks looks to be a great business.

"Across cities in sparsely populated South Texas, hotels have no vacancies, small apartment complexes are full, and mom-and-pop RV parks like the Costillas' are popping up (and filling up) seemingly overnight to catch the overflow of oil field workers pouring into the area."

"The overnight-millionaire money came as mineral rights were leased to oil and gas giants along the 400-mile-long Eagle Ford shale formation, which lies under 24 counties and sweeps from the border across the state to East Texas. But as Eagle Ford production begins in earnest in South Texas, providing housing - and quickly - in sparsely populated counties appears be the next way for the enterprising to profit off of the play."

Read the full news release at Chron.com

Eagle Ford Shale Region Experiencing a Record Drought

South Texas is experiencing one of the worst three droughts on record.  Producers are coming up with creative ways to conserve resources and tap water resources that have gone unused for many years.

"We have not experienced any problems obtaining water," in the play, Richard Wheatley, a spokesman for El Paso Corp., said.

The Houston-based producer and pipeline company, which has drilled about 30 wells in the so-called central region of the Eagle Ford play, uses groundwater either from water wells the company itself has drilled or that it has purchased under contract with ranchers in the region.

El Paso uses no surface water from lakes or rivers in the region, Wheatley said.

Petrohawk, one of the operators that pioneered the development of the Eagle Ford, has reduced its water needs by two-thirds since it began drilling in the play about three years ago, spokeswoman Joan Dunlap said.

"We use much less water for Eagle Ford wells than is required for wells in other plays. We are down to using less than 5,000 barrels per frack stage, as opposed to 15,000 barrels per stage," she said.

She added that the company's operations actually result in increasing the access to water supplies for surface landowners in the region.

"Our Hawkville field sits atop a prolific 500-foot thick aquifer located between 4,000 and 5,000 feet underground," Dunlap said.

"The landowners, largely ranchers and farmers, have no means to access this water for their use. Nearly every lease calls for the drilling of a water well, at the company's expense, that is used for well completion operations and then turned over to the surface owner for future domestic use," she said.

"Since these water wells cost about $500,000 each, we don't know a landowner that isn't tickled pink with

Read the full article at Platts.com

Eagle Ford Shale Jobs Growth Across the Region

Jobs are being created across the play and even adjacent counties are benefiting from the boom.

Victoria already has seen 124 new Pioneer Natural Resources jobs spring up in areas such as pumping services, maintenance and support, and that number should grow to 205 positions by the year's end.

Pawnee, Cuero and Yoakum have seen 117 new jobs with Pioneer open since drilling began, he said.

Hall quoted a study by the University of Texas at San Antonio that showed Eagle Ford Shale production tripled between 2009 and 2010. He went on to say that, by 2020, the drilling will have created 68,000 full-time jobs, ringing in at about $3.2 billion in salaries.

"This is definitely a needle-mover in South Texas," he said.

Read the full article at victoriaadvocate.com