SOUTH TEXAS’S OIL EXPOSURE
F
alling oil prices at the end of 2014 has prompted concerns about how the South Texas
region can weather the headwinds resulting from the imminent cutback in shale oil drilling
activity in the Eagle Ford region. Should oil prices continue to stay at currently low levels,
what’s in store for the South Texas economy?
This question can be answered by first looking at the exposure of our regional economy
to existing oil and gas drilling activity. The relative size of employment in that industry is
a reasonable measure of the first-order effect of any change in shale oil production. The
accompanying column chart shows the shares of employment in oil and gas extraction and its
support activities across the five metro areas in South Texas in 2014. Except for Brownsville, oil
and gas employment was more concentrated in most metro areas within the region than the
U.S. In Corpus Christi, the oil and gas industry accounted for as much as 6 percent of its area
employment.
Oil & Gas Employment Share, 2014
OIL IMPACTS
The role of
the oil and
gas industry
in South
Texas has
changed
dramatically
since the
1970s.
Source: Bureau of Labor Statistics.
The role of the oil and gas industry in South Texas has changed dramatically since the 1970s.
In Corpus Christi, even though the oil and gas sector has recovered most of its jobs destroyed
during the oil crash in the mid-1980s, direct oil and gas employment now accounts for 6 percent
of total area employment, which is still one-third less than that during its peak three decades
ago.
Annual Review of South Texas Economy
25