National Public Radio recently took a close look at one of the key economic benefits associated with the current boom in U.S. oil production—its impact on consumer spending.
As a surge in production from the Eagle Ford region has created numerous high-paying jobs in South Texas, commercial activity in the area has increased considerably. Reporters with NPR's StateImpact Texas project recently examined sales tax data from the Texas Comptroller's Office to find out just how significant the boom's impact on consumer spending has been.
Tax collection figures for Karnes, Atascosa, Gonzales, Live Oak and Dimmit counties were the focus of the investigation, chosen for their proximity to the Eagle Ford's most productive areas. Data was also examined for Bandera County, which is comparable to the others in terms of size but located much farther away from the booming oilfields in the southern part of the state.
Reporter links increase in consumer activity to rising oil production
According to the Texas Railroad Commission, oil production in the Eagle Ford region rose from about 350 barrels per day to almost 385,000 barrels per day between 2008 and 2012. Over the same four-year period, average sales tax revenues for the five counties located close to the play jumped from about $650,000 per year to more than $5.8 million per year.
Meanwhile, sales tax collection in Bandera County remained almost flat, hovering at around $450,000 per year. NPR's Michael Marks connected the dots in an article discussing how the two trends are related.
"The results painted a vivid picture of just how much money is flowing through the Eagle Ford region," Marks wrote, adding that he believes the boom has transformed the local counties into "an economic engine for Texas."
Technology remains the key driver of development
Because consumer spending makes up such a substantial portion of the U.S. economy, the increase spurred by expanding oil and gas activity has the potential to result in tangible growth for communities across the country. Also, as we've discussed, the success of the oil and gas industry generates opportunities and benefits for all Americans.
However, in order to keep the boom going, producers will need to continue improving the productivity of their oil and gas wells using new technologies.
One of the most promising options available to well operators is the hydraulic jet pump. This powerful solution is an especially valuable addition to an oilfield because it offers a high level of versatility.
The unit's streamlined design allows it to be deployed in straight, horizontal or deviated wells. It can be used to quickly complete drill stem testing and initiate production at a new site or improve recovery rates at an existing well.
Jet pumps can even be deployed at sites where problems with the completion of well casing would limit the effectiveness of other artificial lift solutions. And, with no downhole moving parts, the unit's maintenance needs are minimal.