Black gold has been a long time friend to Texas energy production and a recent boom in both oil and natural gas exploration in the U.S. is showing positive effects once again in our Lone Star state, even right here at home in West Texas.
"The last five years, we've seen a renewal across the United States in both oil and gas production," Bernard Weinstein said. "Last year was the fourth consecutive year in a row that we saw an increase in oil output. In 2012, record output of natural gas in the United States. That's helping many regions in the country, including the Plains of Texas and the Lubbock area."
The Associate Director of the Maguire Energy Institute, Bernard Weinstein, Ph.D. recently visited Lubbock to discuss some immediate positive changes we may be seeing in our local economy because of the big interest here in
"There's lots of preliminary testing going on and the potential for producing oil and gas from shale in this region is quite high. The income from bonus payments and leases is helping a lot of farmers in this region survive during tough economic times," Weinstein said. "So on balance, this resurgence in the fossil fuel production of the United States has been a real plus for this part of the state."
But land owners with mineral rights won't be the only ones to benefit. Higher numbers of available jobs plus increased revenues for the entire state will follow the increased fossil fuel production.
"Number one, we're talking about jobs, and these are mainly high wage jobs that go along with energy production and processing," Weinstein said. "Number two, you see a lot of investment in plant and equipment. That's good for the property tax base. That's good for municipalities and counties and school districts. Local governments also derive revenue from the value of oil and gas leases."
But fracking carries with it some negative connotations about its effect on the environment. Weinstein said that each state controls and regulates the process, and Texas makes sure groundwater is not contaminated as an aftereffect of fracking.
"Some environmentalists don't like hydraulic fracturing, which is the technology that is used to extract oil and gas from shale plays. They say that it's unsafe, that it pollutes ground water, that you have methane emissions that are
bad for the air. But in fact, that's not the case," Weinstein said. "We have been using hydraulic fracturing for 60 years across the United States. It has been used in probably 500,000 wells and there has never been a documented case of groundwater pollution associated with hydraulic fracturing."
Other possible downsides to skyrocketing oil and gas production in our region include possible housing shortages and complaints about traffic and noise. But according to Weinstein, the good far outweighs the bad when it comes to possibilities for growth to our local economy.
"I'm fairly confident that over the next year or two we'll see an uptake in natural gas prices, that will result in more drilling, that will result in more bonus payments and lease revenues for farmers who have mineral rights on their
property," Weinstein said. "In terms of how it affects the municipality of Lubbock and the counties surrounding the region, to the extent we have more people, we have more business, that means more sales tax. To the extent we see more investment in the oil and gas industry, that's good for property tax revenues. So I think for the outlook of the region, tying to this oil and gas production, is very, very positive."
Weinstein said that last year alone, Texas saw a 30 % jump in revenues from oil and gas. And although both crude oil and natural gas contracts for immediate futures are down slightly, the long term outlook shows increases.