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