AQUA BOOK 2015 | Page 24

For the Eagle Ford shale, Tunstall of University of Texas-San Antonio (2011) published a similar report in 2011, followed by annual updates. In the 2012 report, the estimates for the “core” Eagle Ford region of 15 counties imply an average multiplier of 2.23 for employment and 1.28 for wage income. The 2014 update also includes impact estimates for six counties surrounding the core region. Partly because some of those “peripheral” counties, such as Nueces and San Patricio, are within a metro area, their estimated multiplier effects are remarkably larger than the estimates for the core counties, most of which represent rural communities. More specifically, the employment multiplier for those peripheral counties is 4.5 on average. The accompanying table shows the IMPLAN multipliers for the industry segments directly related to oil and gas mining activities: oil and gas exploration, drilling, extraction and support activities. The multipliers are listed respectively for DeWitt county, the 23-county Eagle Ford formation, and the entire state of Texas. DeWitt county, part of the Eagle Ford formation, has the median number of oil wells across all Texas counties. IMPLAN Multipliers OIL IMPACTS DeWitt County 22 The larger the size of an area, the larger its multipliers. Eagle Ford Region Texas State Employment Income Employment Income Employment Income Extraction of natural gas & oil 1.90 1.48 2.16 1.50 3.62 1.56 Extraction of natural gas liquids 2.39 1.42 2.88 1.44 4.07 1.62 Drilling oil & gas wells 1.93 1.53 2.17 1.53 2.98 1.68 Oil & gas support activities 1.44 1.22 1.60 1.25 2.06 1.55 Source: IMPLAN, 2014. According to the table of multipliers, extraction of natural gas liquids generates the greatest multiplier effects in employment, and drilling activity generates the largest multiplier effects in income. Other things being equal, greater earnings of the direct employees generate larger income multipliers. Conversely, support activities for oil and gas extraction have the smallest multipliers as those activities generally involve fewer skills and thus lower-paying jobs. The table shows an interesting pattern: The larger the size of an area, the larger its multipliers. A larger geographical region tends to have a smaller leakage to imports from suppliers outside that region. As compared to individual counties, a region like the Eagle Ford shale also better captures interactions or spillovers between counties within that region. Moreover, a larger region like the state of Texas tends to have a more diversified economy, in which more goods and services are available within the region. Annual Review of South Texas Economy