Eagle Ford Consortium: Managing South Texas Growth

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David BlackmonThe second annual Eagle Ford Consortium began in San Antonio today, one of the most effective collaboration and facilitation groups South Texas has ever seen.

Leodoro Martinez

Leodoro Martinez

The leadership displayed by Consortium Chairman Leodoro Martinez and others in organizing and managing this effort has been truly extraordinary. The Consortium has become a model for leaders in other shale plays across the United States.

As the Texas state lead for America’s Natural Gas Alliance at the time, I was fortunate to play a small role in the formation of the Consortium, and have been honored to participate in its conferences and events.  I have no doubt that this week’s conference will be another huge success for the Consortium and South Texas.

Eagle Ford Shale EIA MAP

Click for larger image.

I grew up in Beeville on the southeastern edge of the Eagle Ford Shale, so it’s given me great pleasure to watch the shale’s development and the unprecedented economic prosperity it has brought to this 25-county region of Texas.

Today’s a good day to reflect on what the Eagle Ford means to Texas.

How big is the Eagle Ford Shale?  According to a report released by the research and consulting firm Wood Mackenzie in early January, it’s now the world’s largest oil and gas development based on total capital expenditures.  Even for Texas, that’s pretty big.

As Wood-Mac Analyist Callan McMahon noted, “Some of these numbers can be difficult to put into perspective…”

Yes, they can. It’s something I and others have struggled with as we’ve given talks about the Shale to various audiences since 2009.  The Eagle Ford Shale likely will become the largest oil field ever discovered in the lower 48 states in terms of total production.  Today, thanks largely to the rapid increase in Eagle Ford oil production, Texas produces about 30% of America’s oil production.

Lower48ShalePlayMAP

The development of the Eagle Ford and other shale plays around the state has created a tax windfall.  Larger than expected severance tax collections have given the Texas Legislature more than $12 billion in the Rainy Day Fund.  This likely will allow the Legislature to finally fund part of the the state’s Water Plan, unfunded since it first passed in 1997.

The big balance in the Rainy Day Fund also might be tapped to help counties in the Eagle Ford to fund the repair and improvement of county roads affected by the high volume of industry-related truck traffic.

The recent focus has been on Eagle Ford oil production, but it’s important to note that the Eagle Ford could become the largest natural gas field ever discovered in Texas over the next several decades.  Thanks largely to the Eagle Ford, shale natural gas production almost tripled between 2007 and 2012, and today, Texas produces about 30% of the nation’s natural gas.

This huge abundance of natural gas is a blessing for Texas power generators, as providers look for alternatives as increasingly strict EPA air quality regulations make it more difficult to generate electricity by burning coal.  A Bloomberg report released in January showed that U.S. carbon emissions had dropped dramatically, to 1994 levels, largely as a result of fuel switching in the power generation sector from coal to natural gas.  This was accomplished without signing onto any multi-national treaties or suffering under any command-and-control regulatory regime.

Texas is leading the way.

The reality of abundant natural gas is also a blessing for Texas and the U.S. in the manufacturing sector of the economy, where natural gas is used as a feedstock in all manner of chemical, fertilizer, plastics and other manufacturing processes.  A study released by the American Chemistry Council last May projects that abundant, affordable natural gas will lead to the following outcomes in the coming years in the manufacturing sector:

  • $72 billion in new capital investment and construction activities, resulting in a boost of $207.6 billion in overall economic activity;
  • An increase of $121 billion in the output of paper, chemicals, plastic, rubber, glass, iron, steel, aluminum, foundries and fabricated metal products;
  • Direct generation of more than 200,000 high paying jobs;
  • Indirect generation of more than 979,000 jobs in the supply chain and elsewhere in the economy;
  • $26.2 billion in annual federal, state and local tax revenues;

On and on it goes.  A significant percentage of these new investments, economic activity and jobs will be generated in Texas for Texans.

Much of this is thanks to the development of the Eagle Ford Shale. The Eagle Ford Consortium has played a significant role in ensuring orderly development, and maximizing benefits across the communities in the region.

So let’s all tip our hats to Leodoro and the rest of the leadership in the Eagle Ford Consortium.  God bless them all, God bless the Eagle Ford Shale, and God bless Texas.

 

David Blackmon is a managing director of Strategic Communications for FTI Consulting, based in Houston and serves as Executive Director for the Consumer Energy Alliance Texas (CEA-TX).  Prior to joining FTI in 2012, David had a 33 year career in the oil and gas industry, working public policy issues for a number of companies including Shell, Burlington Resources, El Paso Corp., and Coastal States.  

David has also led numerous industry-wide efforts to address regulatory and legislative issues at the local, state and federal level. From April 2010 through June 2012, David served as the Texas State Lead for America’s Natural Gas Alliance.  

David is past Chairman of Department of Interior’s Royalty Policy Committee, a long-time Vice Chair of IPAA’s Land and Royalty Committee, and chaired the Access and Environmental Subcommittee for the National Petroleum Council’s 2003 North American Natural Gas Study.

David attended Texas A&I University and The University of Texas, earning B.A. in accounting.

 

Related Stories on the Rivard Report:

Water Security: Will Texas Leadership Finally Act?

Natural Gas and Climate Instability: A Response to the Eagle Ford Shale Forum

Eagle Ford Forum II: Sustaining the Boom and Averting the Bust

Eagle Ford Heyday: Economic Boom Obscures Long-Term Issues

The Texas Lege: Do the Right Thing, Please

 

 

7 thoughts on “Eagle Ford Consortium: Managing South Texas Growth

  1. Economic prosperity without water is a fantasy. Hope the Consortium is reading today’s Texas Tribune article about water disappearing in Carrizo Springs.

  2. It’s disgraceful that you’re publishing articles on fossil fuels written by fossil fuel executives who gleefully dismiss the “multi-national treaties” and “command-and-control regulatory regimes” that might preserve the climate we grew up with. While the Eagle Shale is certainly an important local issue, we need nuanced articles on the matter, not industry PR pieces.

  3. Mr. Bush, the writer is a consultant – not a “fossil fuel executive”. Can you provide links to the treaties or regulatory regimes you speak of?

  4. As for the author’s bio, I was confused by his frequent use of the word executive and his “33 year career in the oil and gas industry”. He turns out to be a longtime lobbyist for the fossil fuel industry, not an executive.

    He is heavily involved with the Consumer Energy Alliance, which is a pro-Canadian-tar-sands and pro-fracking industry group. (The tar sands industry is the massively polluting group behind the Keystone XL pipeline). Here’s a long Slate article on the Consumer Energy Alliance and its efforts against low-carbon-fuel standards. http://www.salon.com/2011/12/15/big_oil_and_canada_thwarted_u_s_carbon_standards/singleton/

    Stuff he’s retweeted includes “”Global Warming Just Isn’t Happening” and “Global Warming Scam Will be Over By Christmas” http://www.twylah.com/GDBlackmon/topics/global-warming .

    He seems to be a global warming denier who actively fights against carbon regulation, and not someone to be trusted to write on the issue.

  5. For one thing, it’s better to call it Climate Change because global warming is just one aspect of the bigger picture. The guy that wrote this article is focused on the economics of Eagle Ford and that is important regardless of his lobbying activities.

    If you’re concerned enough about the environment then become the change you want to see. Be a part of the Eagle Ford Consortium and follow-up with them about the environment and similar issues. How about writing an article on here about alternatives to the current methods of extracting fuels?

    There is no need to take it out on the Rivard Report!

  6. You are the ones who “hope to be a catalyst for urban transformation and progressive economic and cultural development”. If you establish those goals for yourself you also have to hold yourself accountable when you fail to meet them. Boosterism about fossil fuel production is about as anti-progressive as you can get.

    • The Rivard Report hopes to be a catalyst and a forum for discussion on these issues. Thank you, Frederic, for participating.

      I will second David’s invitation for you to write your piece of mind. We’ve also published Lanny Sinkin on the subject (Natural Gas and Climate Instability: A Response to the Eagle Ford Shale Forum, see above in Related Stories).

      Though I personally don’t agree with the general rush to support extraction of natural gas and oil in Eagle Ford, I’m glad that the consortium was created to discuss how to mitigate economic, social and environmental effects. At least there is a discussion. (Instead of companies just coming in and taking what they want from the land/community.) Personally, I think that some of that time and money might be better spent on finding/developing new, renewable sources of energy or conservation efforts … at the very least how to manage the environmental effects of extraction. More can be done in these areas and though the forums/consortiums bring up these issues … it seems to be just a lot of talking, not enough action.

      A larger effort to transition us away from natural gas and oil is needed – but we can’t ignore that these sources of energy will continue to be part of our energy portfolio for years to come.

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