DATA POINTS

By

THE CAPITAL AREA COUNCIL OF GOVERNMENTS

www.datapoints.org THE INTERSECTION OF HUMAN AND NATURAL RESOURCES
During the past decade, horizontal hydraulic fracturing, commonly known as fracking, has revolutionized domestic production of oil and natural gas by allowing the extraction of previously inaccessible natural resources. Largely thanks to fracking, U.S. oil and gas production is expected to surpass Saudi Arabia by 2020. Locally, however, oil and gas production continues to fall. So how can Central Texas, which lacks the abundance of natural resources present in much of the state, take advantage of the national energy boom? Thanks to the regions storied quality of life and wealth of engineering talent, Central Texas is capturing a growing piece of the states hundred-billion dollar energy sector. Without the benefit of immediate geographic fortune, Central Texas has instead relied on talent to successfully support a burgeoning oil and gas industry. Fracking is a tremendously demanding technology and Central Texas has a proven track record of recruiting and producing workers with the skills necessary for industry success. As a result, companies located in Central Texas have access to both highly-skilled workers as well as relative proximity to their operations elsewhere in the state, including the Eagle Ford shale to the south. The ability of Central Texas to successfully leverage human capital is reflected in regional oil and gas employment figures. Since 2003, direct employment in Central Texas oil and gas extraction sector has soared 400 percent, jumping from approximately 400 to 1,600 workers. The growth of oil and gas employment in Central Texas is even more impressive considering that during the past decade local gas production has declined by more than 20 percent and natural gas production has declined by approximately 50 percent since 2002. The marriage of human and natural resources in Central Texas produces enormous wealth for the region. Prevailing wages within Central Texas oil and gas industry are extraordinary. The average worker directly employed in the 10-county CAPCOG region oil and gas sector earns an average annual salary of $244,000. Given the size of the sector locally, the direct payroll of the regions oil and gas sector exceeds $400 million. Supporting workers in occupations such as engineering and accounting likely push the total economic impact far higher.

NOVEMBER 2012
CAPCOG REGION OIL & GAS EXTRACTION EMPLOYMENT 2,000 1,500 1,000 500 0 MIDDLE-SKILL (48.2%)
Includes high school graduates, individuals with some college but no degree, and those with an associates degree.

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: EMSI

CAPCOG REGION OIL & GAS INDUSTRY VERSUS CITY OF AUSTIN

CITY OF AUSTIN OIL & GAS INDUSTRY

TOTAL EMPLOYMENT

12,873 $500 $400 $300 $200 $100 $0

1,687

TOTAL SALARIES (IN MILLIONS) $484M $412M

Source: U.S. Bureau of Labor Statistics

AUSTIN OIL & NATURAL GAS PRODUCTION

5,000,000 4,000,000 Oil barrels 3,000,000 2,000,000 1,000,000 0 Oil Production Natural Gas Production 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Thousand cubic feet

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: U.S. Census Bureau / U.S. Bureau of Labor Statistics