West Texas Energy Consortium Region: Ten County-Level Economic Impacts of Oil and Gas Activities

Transcription

1 West Texas Energy Consortium Region: Ten County-Level Economic Impacts of Oil and Gas Activities Center for Community and Business Research at The University of Texas at San Antonio s Institute for Economic Development 1

2 Acknowledgements This report was performed by the University of Texas at San Antonio Institute for Economic Development s Center for Community of Business Research. The project was supported with funding from the West Texas Energy Consortium. Any finding, conclusions or opinion are those of the authors and not necessarily those reflected by The University of Texas at San Antonio or the West Texas Energy Consortium. Javier Oyakawa, M.A., M.Sc., Lead Investigator Thomas Tunstall, PhD, Principal Investigator Research Assistants: Gina Conti, Hector Torres, Ricardo Avalos, Jason Hernandez, Binbin Wang, John Rodriguez, Neeraj Ravi, Feihua Teng, and Christina Valerino. Hisham Eid, GIS specialist 2

3 Contents 1. Acknowledgements Executive Summary Introduction The West Texas Energy Consortium and the Severance Tax Fisher County Overview of Fisher County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Fisher County in Educational Attainment Amounts Subject to State Sales Tax Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Glasscock County Overview of Glasscock County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Glasscock County in Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes

4 Commuting Patterns Economic Impacts in Economic Impacts in Howard County Overview of Howard County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Howard County in Building Permits Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Irion County Overview of Irion County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Irion County in Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes Commuting Patterns Economic Impacts in

5 Economic Impacts in Martin County Overview of Martin County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Martin County in Building Permits Educational Attainment Amounts Subject to State Sales Tax Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Mitchell County Overview of Mitchell County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Mitchell County in Building Permits Educational Attainment Amounts Subject to State Sales Tax Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Nolan County Overview of Nolan County

6 Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Nolan County in Building Permits Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Reagan County Overview of Reagan County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Reagan County in Building Permits Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Scurry County Overview of Scurry County Per Capita Income, Population, and Industries

7 Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Scurry County in Building Permits Educational Attainment Amounts Subject to State Sales Tax County Budgets Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Sterling County Overview of Sterling County Per Capita Income, Population, and Industries Population Growth Comparison Job Growth Comparison Natural Resource and Mining Employment Growth Comparison Location Quotients for Natural Resource and Mining Employment Population Projections Total Employment Forecast for Sterling County in Educational Attainment Amounts Subject to State Sales Tax Employment Changes Commuting Patterns Economic Impacts in Economic Impacts in Appendices Appendix A: County Budgets and Road Expenditures Appendix B: West Texas Consortium Hotel Occupancy Data References

8 Executive Summary The oil and gas industry in the core 10-county area of the WTxEC in 2012 had an impact close to $14.5 billion, supported nearly 21,450 full-time jobs, paid $1 billion in wages and salaries, generated almost $472 million in state revenues including $187 million in severance taxes added approximately $6.2 billion in gross regional product, and contributed nearly $447 million in local governments revenues. By 2022, those impacts will grow to $20.5 billion in output, supporting 30,500 full-time jobs, paying $1.8 billion in wages and salaries, generating $701 million in state revenues including $334 million in severance taxes creating close to $9.4 billion in gross regional product, and contributing about $664 million in local government revenues. Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. Taking into consideration low- and high-price scenarios, the impacts in 2022 could vary widely. This study estimates scenarios where low prices of oil in the future could produce an output as low as $7.6 billion, and where high prices of oil could see enormous growth, as high as $34.3 billion. The ranges of these figures are broad due to high variability in the prices of oil and gas, the challenges of forecasting future oil and gas activities, changes in the number of wells per rig, and changes in productivity per well. 8

9 Estimated Impacts for West Texas Energy Consortium at the Regional Level 2022 in millions of dollars * Low Estimate Moderate Estimate High Estimate Output $7,589 $20,524 $34,295 Employment 11,822 30,540 49,690 Payroll $714 $1,865 $3,047 Gross Regional Product $3,371 $9,434 $16,224 Estimated Local Government Revenues $226 $664 $1,190 Estimated State Revenue, incl. severance taxes $238 $701 $1,257 * 2012 dollars Source: IMPLAN software version 3, database Total Impact Three Scenarios 9

10 The effects across different counties are diverse. For 2012, in terms of output, the most affected counties are Howard ($4.2 billion), Martin ($2.8 billion), and Scurry ($1.9 billion). For 2022, Howard appears in first place ($4.4 billion), Reagan in second place ($4.3 billion), and Irion in third place ($3.2 billion). Fisher and Sterling counties appear to be affected the least among the 14 counties with $2.9 billion and $2.7 billion in 2012 and 2022, respectively. County Howard 2012 Total Output Impact, in millions of $ $4,238.9 Total Output Impacts County Howard 2022 Total Output Impact, in millions of $ $4,461.0 Martin $2,863.2 Reagan $4,359.9 Scurry $1,903.4 Irion $3,238.9 Reagan $1,771.5 Martin $2,666.7 Glasscock $1,468.7 Glasscock $1,871.2 Irion $856.7 Nolan $1,484.7 Mitchell $727.0 Mitchell $1,080.8 Nolan $556.8 Scurry $564.6 Sterling $178.9 Fisher $384.9 Fisher $176.3 Sterling $383.2 Source: CCBR Estimations using IMPLAN software version 3, database

11 In terms of employment, the most impacted counties in 2012 are Martin (4,610 full-time jobs), Scurry (2,966 full-time jobs), and Howard (2,808 full-time jobs). For 2022, the three most impacted counties are Reagan (5,131 full-time jobs), Irion (4,586 full-time jobs), and Martin (4,002 full-time jobs). Similar to the output impacts, Sterling appears among the least impacted with 275 and 637 full-time jobs in 2012 and 2022, respectively. Something similar occurs to Fisher. Total Employment Impacts County Martin 2012 Total Full-Time Employment 4,610 County Reagan 2022 Total Full-Time Employment 5,131 Scurry 2,966 Irion 4,586 Howard 2,808 Martin 4,002 Reagan 2,600 Nolan 3,714 Glasscock 1,657 Howard 2,783 Nolan 1,640 Glasscock 1,884 Mitchell 1,348 Mitchell 1,810 Irion 1,247 Scurry 1,208 Fisher 394 Sterling 637 Sterling 275 Fisher 590 Source: CCBR Estimations using IMPLAN software version 3, database

12 Between the fourth quarter of 2011 to the fourth quarter of 2012, for the aggregate of all 10 counties, employment increased by 737 jobs, a 2.20 percent increase. For the 10 counties, the highest growth rate corresponds to other services (8.80 percent increase); followed by the natural resources & mining sector (8.00 percent increase), and the manufacturing sector (7.80 percent increase). Employment Changes in 10-County Region th Quarter to th Quarter Industry Employment th Quarter Employment th Quarter Employment Change Percent Growth, Other Services % Natural Resources & Mining 4,910 5, % Manufacturing 2,029 2, % Leisure & Hospitality Group 2,693 2, % Construction 2,213 2, % Education & Health Services 9,219 9, % Trade, Transport. & Utilities 6,904 6, % Financial Activities Group 1,048 1, % Information % Public Administration 2,474 2, % Professional Business & Other Services 1,105 1, % Total, All Industries 33,721 34, % Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to 2012 Employment changes by the Texas Workforce Commission are based on establishments paying employment insurance and do not include the self-employed. These statistics do not include the number of workers living in hotels, RV parks, and man camps, among other lodging facilities. 1 1 These differences are discussed in Javier Oyakawa A Framework for the Study and Forecast of Labor Force, Employment, Population, Migration, and Commute Changes in the Eagle Ford Shale. Paper presented at the 44 th Annual Conference of the Urban Affairs Association. March 19-22, 2014, San Antonio, Texas. 12

13 The gross county product (GCP) impacts provide a better picture of the benefits obtained from oil and gas activities because these values include only earnings and surplus, and do not double count them as might happen with the output numbers. For 2012, in terms of GCP, the most impacted counties are Martin ($1.3 billion), Howard ($1.1 billion), and Scurry ($985 million). For 2022, Reagan ranks first ($2.1 billion) Irion is second place ($1.5 billion), and Martin takes the third place ($1.3 billion). County Martin Total Gross County Product Impacts 2012 Total Gross County Product Impact, in millions of $ $1,388.1 County Reagan 2022 Total Gross County Product Impact, in millions of $ $2,134.0 Howard $1,154.0 Irion $1,524.7 Scurry $985.0 Martin $1,385.3 Reagan $817.9 Howard $1,191.8 Glasscock $686.4 Glasscock $934.2 Irion $385.0 Nolan $757.9 Mitchell $343.4 Mitchell $557.0 Nolan $249.3 Scurry $296.9 Sterling $87.2 Fisher $198.1 Fisher $77.5 Sterling $186.2 Source: CCBR Estimations using IMPLAN software version 3, database

14 The estimated state revenue provides a better picture of the economic benefits that the state of Texas gathered in 2012.This state revenue was then broken down by the amount gathered by each respective county. For 2012, the counties with the highest estimated state revenue are Martin ($116 million), Scurry ($85 million), and Glasscock ($61 million). Based on the predictions and calculations, the counties with the highest estimated state revenue for 2022 are Reagan ($157 million), Irion ($117 million) and Martin ($115 million). County Estimated State Revenue 2012 and 2022 Estimated State Revenue 2012, in millions of $ County Martin $115.7 Reagan Estimated State Revenue 2022, in millions $ $157.0 Scurry $85.1 Glasscock $61.8 Reagan $61.3 Howard $54.6 Irion $31.6 Mitchell $28.7 Nolan $15.8 Sterling $6.7 Fisher $5.8 Irion $117.3 Martin $114.9 Glasscock $81.5 Nolan $58.0 Howard $52.6 Mitchell $48.3 Scurry $22.1 Fisher $17.1 Sterling $12.6 Source: CCBR Estimations using IMPLAN software version 3, database

15 The estimated local revenue provides a better picture of the economic benefits that each individual county locally acquired throughout For 2012, the counties with the highest estimated local revenue are Martin ($110 million), Scurry ($80 million), and Glasscock ($58 million). Based on predictions and calculations, the counties with the highest estimated local revenue for 2022 are Reagan ($149 million), Irion ($111 million), and Martin ($109 million). County Martin Estimated Local Revenues 2012 and 2022 Estimated Local Revenues 2012, in millions of $ $109.5 County Estimated Local Revenue 2022, in millions of $ Reagan $148.6 Scurry $80.4 Irion $111.3 Glasscock $58.3 Martin $108.9 Reagan $58.0 Glasscock $77.1 Howard $51.8 Nolan $55.0 Irion $29.9 Howard $50.0 Mitchell $27.1 Mitchell $45.5 Nolan $15.1 Scurry $21.0 Sterling $6.3 Fisher $16.2 Fisher $5.5 Sterling $12.0 Source: CCBR Estimations using IMPLAN software version 3, database

16 Another indicator of the benefits from the West Texas oil and gas production is the amount of sales taxes that these counties generate, divided into four quarters, between 2002 and The 10-county area s total sales subject to state sales tax had an increase of $340.0 million by the end this time span. The following graph shows the original values in blue and the smoothed values in red. The smoothed values represent a four-quarter average. Source: Texas Comptroller office, historic sales tax data. 16

17 Introduction The West Texas Energy Consortium is an open forum for coordination and information sharing, organized by the Workforce Solutions Boards in the Concho Valley, West Central Texas, and Permian Basin regions. This is the second phase of a study that the WTxEC contracted with the Center for Community and Business Research at The University of Texas at San Antonio s Institute for Economic Development to estimate the specific economic impacts of the oil and gas industry on each of the following ten counties: Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry, and Sterling. The West Texas Energy Consortium and the Severance Tax The West Texas Consortium is a 10-county region with active drilling. These counties include: Fisher, Glasscock, Howard, Irion, Martin, Mitchell, Nolan, Reagan, Scurry, and Sterling. The following tables detail the severance tax revenue for the ten counties in the consortium. The data was taken from the Texas Comptroller s Office and focuses on crude oil and natural gas tax revenue for the year 2012, as well as the percent change from 2011 to Table 0-1 Source: Texas Comptroller of Public Accounts 17

18 Table 0-2 Source: Texas Comptroller of Public Accounts Reagan County had the highest revenue of the severance tax for crude oil in 2012, a staggering $23.6 million. Martin and Glasscock Counties had over $17 million, with Irion earning $12.8 million. Howard County comes in fifth with a gross revenue for 2012 of $8.4 million. Glasscock County has the highest percent change in crude oil revenue with an 80.7 percent increase from 2011 to Irion County saw a 60.7 percent increase in severance tax revenue. The state of Texas as a whole saw a 44.3 percent increase. Both Sterling and Howard County suffered a negative change in crude oil revenue from 2011 to 2012 with Howard losing the most at 9.1 percent. Table 0-3 Source: Texas Comptroller of Public Accounts 18

19 Table 0-4 Source: Texas Comptroller of Public Accounts The severance tax revenue for natural gas was the largest in Martin County totaling $79 million. Glasscock came in second with $51.6 million. Reagan County, which had the highest revenue for crude oil, was third in natural gas at just over $37.2 million. Scurry and Howard County round out the top five with $27.1 and $22.9 million, respectively. Glasscock, similar to crude oil percent change, has the highest percent change for natural gas tax revenue change with 77.6 percent. Scurry is a close second with a 74.3 percent change. Both Glasscock and Scurry are well above the Texas percent change for natural gas totaling 13.2 percent increase. Fisher, Sterling, and Mitchel County all suffered a negative change in natural gas revenue with the last six counties all losing more than 10 percent. 19

20 Fisher County Overview of Fisher County Fisher County lies on TX-180, north of I-20. There are only three cities in Fisher County. Roby is the county seat, with a population of 643. Rotan and Hamlin are the other two cities, with half of Hamlin lying in Jones County. It was named after Samuel Rhoads Fisher, a signer of the Texas Declaration of Independence. Fisher County is one of 30 prohibition, or entirely dry, counties in the state of Texas. Figure 1-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 20

21 Per Capita Income, Population, and Industries Fisher County has a population of 3,914 in The per capita personal income is $34,088 for The top three employments by industry are farm employment, state and local government, and retail trade; with government and government enterprises being the top industry by earnings. Table 1-1 Fisher County Population 3,914 Per Capita Personal Income 34,088 Total Employment 987 Farm Employment Employment by Industry (Top 3) State and Local Government Retail Trade Government and Government Enterprises Earnings by Industry (Top 3) Farms Earnings Other Services, Except Public Administration Source: Bureau of Economic Analysis (BEA), Regional Accounts 21

22 Population Growth Comparison Fisher County s population growth falls behind the rate of Texas and the study area, according to the U.S. Census Bureau. By 2012, the population of Texas and the WTxEC study area has increased by 22.2 percent and 2.7 percent, while the population of Fisher County has decreased by 9.7 percent when compared to Figure 1-2 Source: U.S. Census Bureau 22

23 Job Growth Comparison Employment in Fisher County decreased 9.8 percent in the twelve-year study period. Fisher County s employment rate has not been consistent with the WTxEC study region or state, which have grown respectively by 14.7 percent and 11.3 percent when compared to Figure 1-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

24 Natural Resource and Mining Employment Growth Comparison Employment in the natural resources and mining super sector increased 51.2 percent for the state of Texas and 74.5 percent for the study area in the period between 2001 and In Fisher County, the employment for the super-sector was not stable, peaking at 35.1 percent in 2005, decreasing to 13.0 percent in 2011, and decreasing 3.9 percent in 2012 when compared to The decline in employment for the sector has followed the same trend as total employment, but has shown a higher degree of turbulence. Figure 1-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

25 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector with total jobs in the local economy, then comparing that to the same ratio for the state level. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Fisher County and the study area report a location quotient greater than 1.0 from The natural resource and mining super sector has a greater significance in the Fisher County than in study area from 2002 to Figure 1-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

26 Table 1-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

27 Population Projections The following table projects Fisher County s population from The projections are divided by ethnicity. Each category contains the percent change. Fisher County is projected by the year 2050 to see an overall decrease in population of 12.7 percent, a 34.4 percent decrease in Anglo population, a 5.9 percent increase in Black population, and a 59.7 percent increase in the Hispanic population. Table 1-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,344-3, , % 3, % % % 27 0% , % 2, % % % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % , % 2, % % 1, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 27

28 Total Employment Forecast for Fisher County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 1-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s forecasts for Workforce Development Areas (WDAs)

29 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Fisher County, 82.9 percent of its population has at least a high school diploma, and only 15.9 percent have completed their bachelor s degree. Table 1-4 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool 52 5% Less than 9th grade 232 8% Kindergarten 49 5% 9th-12th grade, no diploma 246 9% Elementary (grades 1-8) % High school diploma or equiv. 1,147 41% High School (grades 9-12) % Some college, no degree % College or graduate school 70 7% Associate degree 157 6% Total 975 Bachelor's degree % Graduate or professional degree 112 4% Percent with high school diploma 82.9% Total 2,797 Percent with Bachelor's degree 15.9% Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

30 Amounts Subject to State Sales Tax Fisher County s total sales subject to state sales tax were 1.3 million in the first quarter of 2010 with an increase to 2.5 million by the first quarter of 2013, an increase of 96 percent. Below is a 10-year historical graph for Fisher County of the amount of total sales subject to state sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 1-7 Source: Texas Comptroller of Public Accounts 30

31 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Fisher County, there was a 2.6 percent change in employment for all industries. Employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was Natural Resources and Mining with a 72.9 percent increase, and the industry with the highest negative growth in employment was Construction, with a percent change. Table 1-5 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Natural Resources and Mining % Leisure and Hospitality % Public Administration % Prof., Business, and Other Services % Total, All Industries % Trade, Transportation, Utilities % Financial Activities % Education and Health Services % Other Services % Construction % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

32 Commuting Patterns Using the Longitudinal Employer-Household Dynamic (LEHD) mapping programing, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Fisher County can be seen below. When compared to the other nine counties, Fisher County had the second highest percentage, at 69 percent, of employees who live within one of the 10-counties with active drilling. They had the fourth highest percentage of residents who work within the 10-county area. There are 716 people employed in Fisher County. Of the total, 215 work in Scurry and live within one of the 10-counties that are part of the study. The remaining 501 workers are employed in Fisher County but live outside the 10-county study area. Live in 10-county area Table 1-6 Commuting Patterns for Employees Number Percentage % Live outside 10-county area % Total % Source: U.S. Census Bureau s On the Map There are 1,431 workers who live in Fisher County. Of this total, 686 work within the 10-county study area. The remaining 745 workers live in Fisher County but work outside the 10-county study area. Work in 10-county area Table 1-7 Commuting Patterns for Residents Number Percentage % Work outside 10-county area % Total 1, % Source: U.S. Census Bureau s On the Map 32

33 Economic Impacts in 2012 The following table shows the estimated impacts of the oil and gas industry on Fisher County in The rows contain the estimated economic impact for 2012 in regards to the oil and gas industry. During this period, the total output $176 million, a total of $77 million gross county product, and a total of 394 full-time employment. The total estimated state revenue was $5 million, and an estimated severance tax of $1 million, with a total amount of royalties of $16 million, and a total of $6 million lease payments. The drilling and completion expenditures represented $60 million; followed by oil and gas production with $82 million. Estimated Impacts in Fisher, 2012 Table 1-8 Economic Impacts Direct Indirect Induced Total Output $142,586,917 $23,282,178 $10,528,336 $176,397,432 Gross County Product $60,908,752 $10,381,581 $6,240,719 $77,531,052 Employment Full-Time Payroll $10,781,696 $3,380,275 $1,134,293 $15,296,264 Estimated State Revenue $5,839,608 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Fisher, 2012 Table 1-9 Severance Tax $1,972,909 Royalties $16,517,383 Lease Payments $6,580,070 Drilling and completion $60,000,000 Oil and gas production $82,586, Source: CCBR Estimations using IMPLAN software version 3 database

34 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Fisher County. In 2022, it is estimated that a total of 590 Fisher County jobs were supported by the 10-county area under analysis, in addition to $384 million in output as well as over $198 million gross county product. The total estimated state revenue is $17 million, and the total severance tax is $9.9 million with a total of $81 million in royalties and a total of $3 million in lease payments. The drilling and completion expenditures represented $34 million; followed by oil and gas production with $405 million. Estimated Impacts in Fisher, 2022 Table 1-10 Economic Impacts Direct Indirect Induced Total Output $331,136,128 $34,267,210 $19,541,409 $384,944,747 Gross County Product $169,648,577 $16,888,716 $11,583,810 $198,121,103 Employment Full-Time Payroll $23,678,839 $6,009,710 $2,102,966 $31,791,515 Estimated State Revenue $17,173,710 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures Fisher, 2022 Table 1-11 Severance Tax $9,988, Royalties $81,052,314 Lease Payments $3,915,811 Drilling and completion $34,925,022 Oil and gas production $405,261,569 Source: CCBR Estimations using IMPLAN software version 3, database

35 Glasscock County Overview of Glasscock County The following graphs and charts show population growth, total employment, the natural resource and mining employment, and the relationship among Glasscock County, the study area, and the state of Texas. Glasscock County is named after George Washington Glasscock, an early settler of the Austin area. Glasscock County is located on US Highway 87, and it s only town is Garden City, which has a population of just 334. Figure 2-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 35

36 Per Capita Income, Population, and Industries Glasscock County had a total population of just 1,251. The per capita personal income was $32,256. The top three industry are farm employment, state and local government, and forestry, fishing, and related activities; with government and government enterprises being the top industry by earnings. Table 2-1 Glasscock County Population 1,251 Per capita Personal Income 32,256 Total Employment 436 Farm Employment Employment by Industry (Top 3) State and Local Government Forestry, Fishing, and Related Activates Government and Government Enterprises Earnings by Industry (Top 3) Forestry, Fishing, and Related Activities Mining Sources: Bureau of Economic Analysis (BEA), Regional Accounts 36

37 Population Growth Comparison Glasscock County s population growth falls behind the state of Texas and the WTxEC study area. Compared to the 22.2 percent increase of Texas, the study area only increased 2.7 percent during the last twelve years, while Glasscock County decreased 6.8 percent when comparing 2001 and Glasscock County s population has not been consistent with the region or the state. Figure 2-2 Source: U.S. Census Bureau 37

38 Job Growth Comparison Employment growth for Glasscock County during the study period is erratic, but has shown a major upswing since Glasscock County reached the same 14.7 percent rate as the state of Texas in 2012, outpacing the WTxEC study area s 11.3 percent job growth when compared to Figure 2-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

39 Natural Resource and Mining Employment Growth Comparison Employment in the natural resources and mining super-sector increased 51.2 percent in Texas and 74.5 percent for the WTxEC study area between 2001 and Glasscock County s employment growth within the sector has increased to a more modest 22.9 percent between 2001 and Figure 2-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

40 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector with total jobs in the local economy, then comparing that to the same ratio for the state level. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Glasscock County and the study area report a location quotient greater than 1.0 from 2001 to The natural resource and mining super sector has a much greater significance in Glasscock County than in the state of Texas or even the rest of the study area. Figure 2-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

41 Chart 2-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

42 Population Projections The following table projects Glasscock County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Glasscock County is projected by the year 2050 to see a 26.8 percent decrease in Anglo population, a 100 percent increase in Black population, and a 51 percent increase in the Hispanic population. Table 2-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change , , % 1, % 7 0.0% % 1 0.0% , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 42

43 Total Employment Forecast for Glasscock County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 2-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s forecasts for Workforce Development Areas (WDAs)

44 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Glasscock County, 83.2 percent of its population has at least a high school diploma, and 20 percent have completed their bachelor s degree. Table 2-4 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade % Kindergarten % 9th-12th grade, no diploma % Elementary (grades 1-8) % High school diploma or equiv % High School (grades 9-12) % Some college, no degree % College or graduate school % Associate degree % Total 331 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 83.2% Total 746 Percent with Bachelor's degree 20.0% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 44

45 Amounts Subject to State Sales Tax Glasscock County s total sales subject to state sales tax were 5.3 million in the first quarter of 2010 with an increase to 2.2 million by the first quarter of 2013, an increase of 330 percent. Below is a 10-year historical graph for Glasscock County of the amount of total sales subject to state sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 2-7 Source: Texas Comptroller of Public Accounts 45

46 County Budgets The following graph shows the revenues and expenditures for Glasscock County. Their revenues have steadily risen from under $3.5 million in 2009 to over $7.3 million in 2013, while increasing their net surplus. Figure 2-8 Source: Glasscock Reporting Budget Fund 46

47 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012 there was an 8.1 percent change in employment for all industries. Employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was trade, transportation and utilities with a 9.3 percent increase, and the industry with the highest negative growth in employment was Construction, with a 15.8 percent decrease. Table 2-5 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Trade, Transport., and Utilities % Natural Resources and Mining % Total, All Industries % Public Administration % Construction % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Financial Activities n/a n/a n/a n/a Prof., Business, and Other Services n/a 5 n/a n/a Education and Health Services n/a n/a n/a n/a Leisure and Hospitality n/a n/a n/a n/a Other Services n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

48 Commuting Patterns Using the Longitudinal Employer-Household Dynamic (LEHD) mapping program, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Glasscock County can be seen below. When compared to the other nine counties, Glasscock County had the third lowest percentage, at 40 percent, of employees who live within one of the 10-counties with active drilling. However, they had the second highest percentage of residents who work within the 10-county area. There are 249 people employed in Glasscock County. Of this total, 150 work in Glasscock County and live within one of the 10-counties that are part of the study. The remaining 99 workers are employed in Glasscock County but live outside the 10-county study area. Table 2-6 Commuting Patterns for Employees Number Percentage Live in 10-county area % Live outside 10-county area % Total % Source: US Census Bureau s On the Map There are 480 workers who live in Glasscock County. Of the total, 118 work in Glasscock and live within the 10-county study area. The remaining 362 workers are employed in Glasscock County but live outside the 10-county study area. Table 2-7 Commuting Patterns for Residents Number Percentage Work in 10-county area % Work outside 10-county area % Total % Source: US Census Bureau s On the Map 48

49 Economic Impacts in 2012 The following table shows the estimated impacts of the shale oil and gas industry on Glasscock County. In 2012, it is estimated that a total of 1,657 Glasscock County jobs were supported by the 10-county area under analysis, in addition to $1.4 million in output as well as over $686 million gross county product. The total estimated state revenue was $61 million, total severance tax $27 million, an estimated lease payments of $28 million and $222 million in royalties. The drilling and completion expenditures represented $276 million; followed by oil and gas production with $1.1 million, and pipeline construction activity with $9 million. Estimated Impacts in Glasscock 2012 Table 2-8 Economic Impacts Direct Indirect Induced Total Output $1,395,709,629 $50,259,020 $22,801,749 $1,468,770,398 Gross County Product $656,586,417 $16,835,812 $12,991,805 $686,414,034 Employment Full-Time 1, ,657 Payroll $80,406,832 $11,901,887 $2,040,628 $94,349,346 Estimated State Revenue $61,821,808 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Glasscock 2012 Table 2-9 Severance Tax $27,061,044 Royalties $222,028,407 Lease Payments $28,952,307 Drilling and completion $276,257,253 Oil and gas production $1,110,142,037 Pipeline Construction $9,310,340 Source: CCBR Estimations using IMPLAN software version 3, database

50 Economic Impacts in 2022 The following table shows the estimated impacts of the oil and gas industry on Glasscock County. In 2022, it is estimated that a total of 1,884 Glasscock County jobs were supported by the 10-county area under analysis, in addition to $1.9 million in output as well as over $934 million gross county product. The total estimated state revenue was $81 million, total severance tax $49 million and an estimated lease payments of $23 million; with an estimate of $405 million in royalties. The drilling and completion expenditures represented $298 million; while oil and gas production accounted for $2 million and a refinery production of $3.5 million, and pipeline construction activity with $9 million. Estimated Impacts in Glasscock 2022 Table 2-10 Economic Impacts Direct Indirect Induced Total Output $1,780,982,912 $56,365,633 $33,862,244 $1,871,210,789 Gross County Product $894,290,370 $20,575,864 $19,401,815 $934,268,048 Employment Full-Time 1, ,884 Payroll $133,067,851 $14,726,626 $3,072,251 $150,866,729 Estimated State Revenue $81,544,909 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures Glasscock 2022 Table 2-11 Severance Tax $49,533, Royalties $405,771,731 Lease Payments $22,727,635 Drilling and completion $298,062,957 Oil and gas production $2,028,858,656 Refinery Production $3,555,538,000 Pipeline Construction $9,310,340 Source: CCBR Estimations using IMPLAN software version 3, database

51 Howard County Overview of Howard County The following graphs and charts show population growth, total employment, the super sector natural resource and mining (NRM) employment, and the relationship between Howard County, the study area, and the state of Texas. Howard County is located along Interstate 20 and US Highway 87. The County was named after Volney E. Howard, a U.S. Congressman from Texas. Big Spring is the county s seat, with a population 27,282. Other smaller cities include Sand Springs, Coahoma, and Forsan, each with under 1,000 residents. Figure 3-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 51

52 Per Capita Income, Population, and Industries Howard County had a population of 35,122. The per capita personal income was $37,181. The top three industry are state and local government, retail trade, and mining; with government and government enterprises being the top industry by earnings. Table 3-1 Howard County Population 35,122 Per capita Personal Income 31,781 Total Employment 12,935 State and Local Government Employment by Industry (Top 3) Retail Trade Mining Government and Government Enterprises Earnings by Industry (Top 3) Mining Manufacturing Source: Bureau of Economic Analysis (BEA), Regional Accounts 52

53 Population Growth Comparison The population of Howard County has grown by 6.4 percent during the past twelve years. This population growth is consistently higher than the 2.7 percent average of the WTxEC study area, but both percentages are lower than the 22.2 percent average for the state of Texas. Figure 3-2 Source: U.S. Census Bureau 53

54 Job Growth Comparison Employment grew in Howard County at a 3.4 percent lower rate than in the state of Texas over the twelve-year study period. The employment growth percentages for the state of Texas, Howard County, and the WTxEC study area followed a similar pattern. Figure 3-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

55 Natural Resource and Mining Employment Growth Comparison Howard County s employment in the natural resources and mining sector grew by 76.4 percent over the twelve-year study period, which is higher than the WTxEC s study area growth of 74.5 percent and the state of Texas s 51.2 percent in the same sector between 2001 and Development within the oil and gas industry is definitely the driver of growth in Howard County, as the growth in jobs in the sector outpaces total job growth. Figure 3-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

56 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Figure 3-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

57 Both Howard County and the study area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a greater significance in the study area than in Howard County, and its importance has grown over the years. Figure 3-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

58 Population Projections Population projections are an estimate of a future population. The following table projects Howard County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Howard County is projected by the year 2050 to see an increase in total population by 17.4 percent, a 12.5 percent decrease in Anglo population, a 42.9 percent increase in Black population, and a 54.4 percent increase in the Hispanic population. Table 3-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,627-19, , % 18, % % % % , % 18, % % % % , % 18, % % 14, % % , % 18, % % 15, % % , % 18, % % 16, % % , % 18, % % 16, % % , % 18, % % 17, % % , % 17, % % 18, % % , % 17, % % 18, % % , % 16, % % 19, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 58

59 Total Employment Forecast for Howard County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table Table 3-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s forecasts for Workforce Development Areas (WDAs)

60 Building Permits Howard County saw a large increase in single family building permits the last three years, rising from two in 2009, to fifteen in Table 3-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center 60

61 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Howard County, 72.2 percent of its population has at least a high school diploma, and only 10.8 percent have completed their bachelor s degree. Table 3-5 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade 2, % Kindergarten % 9th-12th grade, no diploma 3, % Elementary (grades 1-8) 3, % High school diploma or equiv. 6, % High School (grades 9-12) 2, % Some college, no degree 5, % College or graduate school 1, % Associate degree 1, % Total 7,865 Bachelor's degree 1, % Graduate or professional degree % Percent with high school diploma 72.2% Total 23,664 Percent with Bachelor's degree 10.8% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 61

62 Amounts Subject to State Sales Tax Howard County s total sales subject to sales tax were $64,744,093 in the first quarter of 2010 with an increase to $110,074,460 by the first quarter of 2013, an increase of 70 percent. Below is a 10 year historical graph for Howard County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 3-7 Source: Texas Comptroller of Public Accounts 62

63 County Budgets The following graph shows the revenues and expenditures for Howard County. Their revenues have held steady around $11 million, until they increased Figure 3-8 Source: Howard County, Texas Budgets 63

64 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Howard County, there was a 3.1 percent change in employment for all industries. The employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was manufacturing with a 15.7 percent increase. Table 3-6 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Manufacturing 959 1, % Prof., Business, and Other Services % Leisure and Hospitality 1,107 1, % Total, All Industries 12,392 12, % Construction % Education and Health Services 4,596 4, % Public Administration % Trade, Transport, and Utilities 2, % Natural Resources and Mining % Other Services % Information % Financial Activities % Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

65 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Howard County can be seen below. When compared to the other nine counties, Howard County had the third highest percentage, at 32 percent, of employees who live within one of the 10-counties with active drilling. They also had the third highest percentage of residents who work within the 10-county area. There are 10,683 people employed in Howard County. A total of 7,265 work in Howard and live within one of the 10-counties that are part of the study. The remaining 3,418 workers are employed in Howard County but live outside the 10-county study area. Table 3-7 Commuting Patterns for Employees Number Percentage Live in 10-county area 7,265 68% Live outside 10-county area 3,418 32% Total 10, % Source: U.S. Census Bureau s On the Map There are 12,418 workers who live in Howard County. A total 7,402 work in Howard and live within the 10-county study area. The remaining 5,016 workers are employed in Howard County but live outside the 10-county study area. Table 3-8 Commuting Patterns for Residents Number Percentage Work in 10-county area 7,402 60% Work outside 10-county area 5,016 40% Total 12, % Source: U.S. Census Bureau s On the Map 65

66 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Howard County. In 2012, it is estimated that a total of 2,808 Howard County jobs were supported by the 10-county area under analysis, in addition to $4.2 million in output and more than $1.5 million in gross county product. The total estimated state revenue was $54 million, total severance tax $17 million, a total of $148 million in royalties and an estimated lease payments of $15 million. The drilling and completion expenditures represented $138 million; followed by oil and gas production with $744 million, and pipeline construction activity with $9 million. Estimated Impacts in Howard 2012 Table 3-9 Economic Impacts Direct Indirect Induced Total Output $3,543,275,901 $598,510,145 $97,197,229 $4,238,983,274 Gross County Product $912,082,419 $185,886,274 $56,128,805 $1,154,097,498 Employment Full-Time 827 1, ,808 Payroll $88,277,830 $55,237,978 $20,380,558 $163,896,367 Estimated State Revenue $54,663,733 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Howard 2012 Table 3-10 Severance Tax $17,722,708 Royalties $148,950,866 Lease Payments $15,134,161 Drilling and completion $138,000,000 Oil and gas production $744,754,328 Refinery Production $2,660,521,500 Source: CCBR Estimations using IMPLAN software version 3, database

67 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Howard County. In 2022, it is estimated that a total of 2,783 Howard County jobs were supported by the 10-county area under analysis, in addition to $4.5 million in output and more than $1.2 million in gross county product. The total estimated state revenue was $52 million, total severance tax $22 million, a total of $186 million on royalties and an estimated lease payments of $9 million. The drilling and completion expenditures represented $80 million; followed by oil and gas production with $932 million. Estimated Impacts in Howard 2022 Table 3-11 Economic Impacts Direct Indirect Induced Total Output $3,672,311,610 $681,214,954 $107,534,671 $4,461,061,235 Gross County Product $925,823,833 $204,736,419 $61,327,884 $1,191,888,136 Employment Full-Time 720 1, ,783 Payroll $100,642,574 $57,774,039 $22,201,279 $180,617,893 Estimated State Revenue $52,675,758 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Howard 2022 Table 3-12 Severance Tax $22,973, Royalties $186,420,322 Lease Payments $9,006,366 Drilling and completion $80,327,551 Oil and gas production $932,101,609 Source: CCBR Estimations using IMPLAN software version 3, database

68 Irion County Overview of Irion County The following graphs and charts show population growth, total employment, natural resource and mining employment, and the relationship between Irion County, the study area, and the state of Texas. Irion County is located on the Edwards Plateau in the state of Texas. It is part of the San Angelo Metropolitan Statistical Area. The county is named for Robert Anderson Irion, a secretary of state of the Republic of Texas. Its county seat is Mertzon, and is the only major town in the county. Figure 4-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 68

69 Per Capita Income, Population, and Industries Irion County has a population of 1,620. The per capita personal income is relatively high, at $54,975. The top three employments by industry are farm employment, state and local government, and mining; with mining being the top industry by earnings. Table 4-1 Irion County Population 1,620 Per capita Personal Income 54,975 Total Employment 639 Mining Employment by Industry (Top 3) Farm Employment State and Local Government Mining Earnings by Industry (Top 3) Government and Government Enterprises Farm Earnings Sources: Bureau of Economic Analysis (BEA), Regional Accounts 69

70 Population Growth Comparison Irion County s population has decreased 6.0 percent when compared to This rate is much lower than the 2.7 percent increase in the WTxEC study area and 22.2 percent increase in the state of Texas. Figure 4-2 Source: U.S. Census Bureau 70

71 Job Growth Comparison Irion County s Job growth in the two periods between 2005 and 2008, and 2010 and 2012 far outpaces the similar employment patterns of the WTxEC study area and the state of Texas. The overall job growth in Irion County over the twelve-year study period is 45.4 percent, much higher than rates in the WTxEC study area and the state of Texas. Figure 4-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

72 Natural Resource and Mining Employment Growth Comparison Employment in Irion County increased to percent during the twelve year period. Irion County s employment of natural resources and mining has been growing at a frenetic pace, almost tripling the growth for the region and state. Figure 4-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

73 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Irion County and the study area report a location quotient greater than 1.0 from The natural resource and mining super sector has a much greater significance in the Irion County than in study area. Moreover, the importance of super sector in Irion County became more and more significant during the latter part of the decade. Figure 4-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

74 Chart 4-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

75 Population Projections Population projections are an estimate of a future population. The following table projects Irion County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Irion County is projected by the year 2050 to see an overall decrease in population of 17.6 percent, a 32.5 percent decrease in Anglo population, a 125 percent increase in Black population, and a 22.2 percent increase in the Hispanic population. Table 4-2 Irion County Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,771-1, , % 1, % 4 0.0% % 6 0.0% , % 1, % % % % , % 1, % % % % , % 1, % % % % , % 1, % % % % , % 1, % % % % , % 1, % % % % , % 1, % % % % , % % % % % , % % % % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 75

76 Total Employment Forecast for Irion County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 4-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s forecasts For Workforce Development Areas (WDAs)

77 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Irion County, 81 percent of its population has at least a high school diploma, and only 10.9 percent have completed their bachelor s degree. Table 4-4 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade % Kindergarten % 9th-12th grade, no diploma % Elementary (grades 1-8) % High school diploma or equiv % High School (grades 9-12) 42 13% Some college, no degree % College or graduate school % Associate degree % Total 324 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 81.0% Total 1,132 Percent with Bachelor's degree 10.0% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 77

78 Amounts Subject to State Sales Tax Irion County s total sales subject to sales tax were $1,908,888 in the first quarter of 2010 with an increase to $10,878,385 by the first quarter of 2013, an increase of 470 percent. Below is a 10 year historical graph for Irion County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 4-7 Source: Texas Comptroller of Public Accounts 78

79 County Budgets The following graph shows the revenues and expenditures for Irion County. Their revenues have been marginally higher than expenditures for the last three years, with a decline in 2011, and an upswing in Currently, their expenditures sit at $3.5 million and their revenues at just over $3.6 million. Figure 4-8 Source: Irion County, Texas Budgets 79

80 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Irion County, there was an 18.4 percent increase in employment for all industries. The employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was construction with an increase of 171 percent, and the industry with the highest negative growth in employment was other services, with a 61.5 percent decrease. Table 4-5 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Construction % Prof., Business, and Other Services % Total, All Industries % Trade, Transport, and Utilities % Natural Resources and Mining % Public Administration % Other Services % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Financial Services Group n/a n/a n/a n/a Education and Health Services n/a n/a n/a n/a Leisure and Hospitality Group n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

81 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Irion County can be seen below. When compared to the other 9 counties, Irion County had a 73 percent, of employees who live within one of the 10-counties with active drilling. They also had the second lowest percentage of residents who work within the 10-county area. There are 422 people employed in Irion County. A total of 114 people work in Irion and live within one of the 10-counties that are part of the study. The remaining 308 workers are employed in Irion County but live outside the 10-county study area. Table 4-6 Commuting Patterns for Employees Number Percentage Live in 10-county area % Live outside 10-county area % Total % Source: US Census Bureau s On the Map There are 507 workers who live in Irion County. A total 116 work in Irion and live within one of the 10- county study area. The remaining 391 workers are employed in Irion County but live outside the 10- county study area. Table 4-7 Commuting Patterns for Residents Number Percentage Work in 10-county area % Work outside 10-county area % Total % Source: US Census Bureau s On the Map 81

82 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Irion County. In 2012, it is estimated that a total of 1,247 Irion County jobs were supported by the 10-county area under analysis, in addition to $856 million in output and more than $385 million in gross county product. The total estimated state revenue was $31 million, total severance tax $13 million, with a total of $105 million and an estimated lease payments of $17 million. The drilling and completion expenditures represented $241 million; followed by oil and gas production with $529 million. Estimated Impacts in Irion, 2012 Table 4-8 Economic Impacts Direct Indirect Induced Total Output $770,821,141 $70,762,740 $15,151,022 $856,734,904 Gross County Product $350,226,992 $25,852,280 $8,958,832 $385,038,103 Employment Full-Time ,247 Payroll $50,083,983 $10,168,109 $2,052,200 $62,304,292 Estimate State Revenue $31,643,474 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Irion, 2012 Table 4-9 Severance Tax $13,128,889 Royalties $105,838,375 Lease Payments $17,985,524 Drilling and completion $241,629,266 Oil and gas production $529,191,875 Source: CCBR Estimations using IMPLAN software version 3, database

83 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Irion County. In 2022, it is estimated that a total of 4,586 Irion County jobs were supported by the 10-county area under analysis, in addition to $3.2 million in output and more than $1.5 million in gross county product. The total estimated state revenue was $117 million, total severance tax $62 million, a total of $532 million in royalties and an estimated lease payments of $45 million. The drilling and completion expenditures represented $1 million; followed by oil and gas production with $2.6 million. Estimated Impacts in Irion, 2022 Table 4-10 Economic Impacts Direct Indirect Induced Total Output $2,957,003,752 $217,217,348 $64,697,861 $3,238,918,961 Gross County Product $1,400,006,497 $86,046,043 $38,682,620 $1,524,735,160 Employment Full-Time 2,204 1, ,586 Payroll $247,634,769 $36,659,136 $8,893,192 $293,187,097 Estiamed State Revenue $117,342,938 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Irion, 2022 Table 4-11 Severance Tax $62,670, Royalties $532,772,810 Lease Payments $45,524,295 Drilling and completion $1,009,949,841 Oil and gas production $2,663,864,048 Source: CCBR Estimations using IMPLAN software version 3, database

84 Martin County Overview of Martin County The following graphs and charts show population growth, total employment, the super sector natural resource and mining employment, and the relationship between Martin County, the study area, and the state of Texas. Martin County is located along Interstate 20. The largest city and the county seat is Stanton, with a population of 2,492. A portion of Midland, Texas extends into Martin County. The county is named for Wylie Martin, an early settler. Martin County is one of 30 prohibition, or entirely dry, counties in the state of Texas. Figure 5-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 84

85 Per Capita Income, Population, and Industries Martin County has a population of 4,934. The per capita personal income is $32,061. The top three employments by industry are farm employment, state and local government, and construction; with government and government enterprises being the top industry by earnings. Table 5-1 Martin County Population 4,934 Per capita Personal Income 32,061 Total Employment 1,549 Farm Employment Employment by Industry (Top 3) State and Local Government Construction Government and Government Enterprises Earnings by Industry (Top 3) Sources: Bureau of Economic Analysis (BEA), Regional Accounts Construction Transportation and Warehousing 85

86 Population Growth Comparison The State of Texas has experienced a population growth that outpaces those of Martin County and the study area according to the U.S. Census Bureau. Martin County s population rate increased 6.8 percent, compared to the 22.2 percent increase of Texas and 2.7 percent growth in the WTxEC study area. Martin County overtook the growth rate for the region in Figure 5-2 Source: U.S. Census Bureau 86

87 Job Growth Comparison Martin County s total employment has been growing at a very high pace since 2009, with a growth of 26.7 percent over the past twelve years. During the same time period job growth rate in the state of Texas grew 14.7 percent and in the WTxEC study area by 11.3 percent. Figure 5-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

88 Natural Resource and Mining Employment Growth Comparison Martin County s jobs in the natural resources and mining super sector increased by 9.7 percent during the past twelve years, although at a sporadic pace. The natural resources and mining sector growth rate was 51.2 percent for the state of Texas and 74.5 percent in the WTxEC study area between 2001 and Figure 5-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

89 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Martin County and the study area report a location quotient greater than 1.0 from The natural resource and mining super sector had greater significance in the Martin County than in the study area until Figure 5-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

90 Figure 5-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

91 Population Projections Population projections are an estimate of a future population. The following table projects Martin County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Martin County is projected by the year 2050 to see an overall increase in population of 41.9 percent, an 8.7 percent increase in Anglo population, a 6.1 percent increase in Black population, and an 88.8 percent increase in the Hispanic population. Table 5-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,746-2, , , % 2, % % 2, % % , % 2, % % 2, % % , % 2, % % 2, % % , % 2, % % 2, % % , % 2, % % 2, % % , % 2, % % 2, % % , % 2, % % 3, % % , % 2, % % 3, % % , % 2, % % 3, % % , % 2, % % 3, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 91

92 Total Employment Forecast for Martin County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 5-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

93 Building Permits Martin County saw an increase of single family building permits from two to four in the last decade. Table 5-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center 93

94 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Martin County, 72.2 percent of its population has at least a high school diploma, and only 12.2 percent have completed their bachelor s degree. Table 5-5 County Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade % Kindergarten % 9th-12th grade, no diploma % Elementary (grades 1-8) % High school diploma or equiv % High School (grades 9-12) % Some college, no degree % College or graduate school % Associate degree % Total 1,222 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 72.2% Total 2,849 Percent with Bachelor's degree 12.2% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 94

95 Amounts Subject to State Sales Tax Martin County s total sales subject to sales tax were $6,125,028 in the first quarter of 2010 with an increase to $9,522,136 by the first quarter of 2013, an increase of 32 percent. Below is a 10 year historical graph for Fisher County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 5-7 Source: Texas Comptroller of Public Accounts 95

96 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Martin County, there was an increase of 11.4 percent in employment for all industries. The employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was the leisure and hospitality group with a 33.8 percent increase. No industries saw a negative employment change. Table 5-6 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Leisure and Hospitality Group % Financial Activities Group % Trade, Transport, and Utilities % Natural Resources and Mining % Total, All Industries 1,417 1, % Prof., Business, and Other Services % Construction % Other Services % Public Administration % Education and Health Services % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

97 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Martin County can be seen below. When compared to the other 9 counties, Martin County ranked eighth, at 52 percent, of employees who live within one of the 10-counties with active drilling. They had the lowest percentage of residents who work within the 10-county area. There are 157 people employed in Martin County. A total 75 people work in Martin and live within one of the 10-counties that are part of the study. The remaining 82 workers are employed in Martin County but live outside the 10-county study area. Table 5-7 Commuting Patterns for Employees Number Percentage Live in 10-county area % Live outside 10-county area % Total % Source: US Census Bureau s On the Map There are 1,979 workers who live in Martin County. A total of 258 work in Martin and live within one of the 10-county study area. The remaining 1,721 workers are employed in Martin County but live outside the 10-county study area. Table 5-8 Commuting Patterns for Residents Number Percentage Work in 10-county area % Work outside 10-county area 1, % Total 1, % Source: US Census Bureau s On the Map 97

98 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Martin County. In 2012, it is estimated that a total of 4,610 Martin County jobs were supported by the 10-county area under analysis, in addition to $2.8 million in output and more than $1.3 million in gross county product. The total estimated state revenue was $115 million, total severance tax $48 million, with a total of $405 million in royalties and an estimated lease payments of $28 million. The drilling and completion expenditures represented $416 million; followed by oil and gas production with $2 million, and pipeline construction activity with $37 million. Estimated Impacts in Martin, 2012 Table 5-9 Economic Impacts Direct Indirect Induced Total Output $2,481,578,880 $270,545,303 $111,093,590 $2,863,217,774 Gross County Product $1,178,763,719 $143,747,394 $65,635,772 $1,388,146,885 Employment Full-Time 1,923 1, ,610 Payroll $142,249,058 $80,455,643 $17,895,437 $240,600,139 Estimated State Revenue $115,739,565 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Martin, 2012 Table 5-10 Severance Tax $48,100,161 Royalties $405,667,506 Lease Payments $45,621,818 Drilling and completion $416,000,000 Oil and gas production $2,028,337,530 Pipeline Construction $37,241,360 Source: CCBR Estimations using IMPLAN software version 3, database

99 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Martin County. In 2022, it is estimated that a total of 4,002 Martin County jobs were supported by the 10-county area under analysis, in addition to $2.7 million in output and more than $1.4 million in gross county product. The total estimated state revenue was $114 million, total severance tax $69 million, with a total of $561 in royalties and an estimated lease payments of $27 million. The drilling and completion expenditures represented $242 million; followed by oil and gas production with $2.8 million. Estimated Impacts in Martin, 2022 Table 5-11 Economic Impacts Direct Indirect Induced Total Output $2,295,877,155 $249,158,612 $121,698,32 $2,666,734,091 Gross County Product $1,176,256,822 $136,870,598 $72,234,896 $1,385,362,316 Employment Full-Time 1,407 1, ,002 Payroll $164,173,451 $79,403,545 $19,549,138 $263,126,134 Estimated State Revenue $114,984,176 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Martin, 2022 Table 5-12 Severance Tax $69,252, Royalties $561,962,709 Lease Payments $27,149,626 Drilling and completion $242,146,819 Oil and gas production $2,809,813,547 Source: CCBR Estimations using IMPLAN software version 3, database

100 Mitchell County Overview of Mitchell County The following graphs and charts show population growth, total employment, the super sector natural resource and mining employment, and the relationship between Mitchell County, the study area, and the state of Texas. Mitchell County is located along Interstate 20 and State Highway 163. Its seat and only major city is Colorado City, with a population of 4,146. Other towns include Loraine, Lake Colorado, and Westbrook. The county is named after Asa and Eli Mitchell, two early settlers and soldiers in the Texas Revolution. Figure 6-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 100

101 Per Capita Income, Population, and Industries Mitchell County has a population of 9,426. The per capita personal income is $25,002. The top three employments by industry are, state and local government, farm employment and mining; with government and government enterprises being the top industry by earnings. Table 6-1 Mitchell County Population 9,426 Per Capita Personal Income 25,002 Total Employment 2,615 State and Local Government Employment by Industry (Top 3) Farm Employment Mining Government and Government Enterprises Earnings by Industry (Top 3) Mining Transportation and Warehousing Sources: Bureau of Economic Analysis (BEA), Regional Accounts 101

102 Population Growth Comparison Mitchell County s population has declined by 2.5 percent over the past twelve years according to the U.S. Census Bureau. The state of Texas has experienced a population growth that outpaces that of Mitchell County and the study area. Compared to the 22.2 percent increase in Texas, the study area only increased 2.7 percent during the last decade. Figure 6-2 Source: U.S. Census Bureau 102

103 Job Growth Comparison Mitchell County s employment decreased by 3.4 percent during the period between 2001 and The state of Texas and the study area s employment grew almost at the same pace, increasing by 14.7 percent and 11.3 percent. Figure 6-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

104 Natural Resource and Mining Employment Growth Comparison Employment in the natural resource and mining super sector increased by 73.5 percent in Mitchell County and a similar 74.5 percent in the WTxEC study between 2001 and Both these sector job growth rates topped the average for the state of Texas s 51.2 percent rate. Figure 6-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

105 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Mitchell County and the study area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a much greater significance in the study area than in Mitchell County. Figure 6-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

106 Chart 6-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

107 Population Projections Population projections are an estimate of a future population. The following table projects Mitchell County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Mitchell County is projected by the year 2050 to see an overall increase in population of 7.8 percent, a 17.3 percent decrease in Anglo population, a 27.5 percent decrease in Black population, and a 65.7 percent increase in the Hispanic population. Table 6-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,698-5,372-1,240-3, , % 5, % 1, % 3, % % , % 4, % 1, % 3, % % , % 4, % 1, % 3, % % , % 4, % 1, % 3, % % , % 4, % 1, % 4, % % , % 4, % % 4, % % , % 4, % % 4, % % , % 4, % % 4, % % , % 4, % % 4, % % , % 4, % % 4, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 107

108 Total Employment Forecast for Mitchell County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 6-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

109 Building Permits Mitchell County saw a large increase of single family building permits, from zero to four in the last decade. Table 6-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center 109

110 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Mitchell County, 76.2 percent of its population has at least a high school diploma, and only 8.4 percent have completed their bachelor s degree. Table 6-5 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade % Kindergarten % 9th-12th grade, no diploma 1, % Elementary (grades 1-8) % High school diploma or equiv. 2, % High School (grades 9-12) % Some college, no degree 1, % College or graduate school % Associate degree % Total 2,320 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 76.2% Total 6,495 Percent with Bachelor's degree 8.4% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 110

111 Amounts Subject to State Sales Tax Mitchell County s total sales subject to sales tax were $7,752,310 in the first quarter of 2010 with an increase to $11,745,414 by the first quarter of 2013, an increase of 96 percent. Below is a 10 year historical graph for Mitchell County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 6-7 Source: Texas Comptroller of Public Accounts 111

112 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, Mitchell County experienced a 5.2 percent decrease in employment for all industries. The employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was Natural Resources and Mining with a 38.1 percent increase, and the industry with the highest negative growth in employment was Construction, with a percent change. Table 6-6 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Natural Resources and Mining % Prof., Business, and Other Services % Leisure and Hospitality Group % Information % Other Services % Education and Health Services % Manufacturing % Financial Activities Group % Total, All Industries 2,420 2, % Trade, Transport, and Utilities % Public Administration Construction Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

113 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Mitchell County can be seen below. When compared to the other 9 counties, Mitchell County had the highest percentage, at 21.3 percent, of employees who live within one of the 10-counties with active drilling. They had the fifth highest percentage of residents who work within the 10-county area. There are 1,623 people employed in Mitchell County. A total of 1,278 people work in Mitchell and live within one of the 10-counties that are part of the study. The remaining 345 workers are employed in Mitchell County but live outside the 10-county study area. Table 6-7 Commuting Patterns for Employees Number Percentage Live in 10-county area 1, % Live outside 10-county area % Total 1, % Source: US Census Bureau s On the Map There are 2,912 workers who live in Mitchell County. A total of 1,451 work in within one of the 10- county study area. The remaining 1,461 workers are employed in Mitchell County but live outside the 10-county study area. Table 6-8 Commuting Patterns for Residents Number Percentage Work in 10-county area 1, % Work outside 10-county area 1, % Total 2, % Source: US Census Bureau s On the Map 113

114 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Mitchell County. In 2012, it is estimated that a total of 1,348 Mitchell County jobs were supported by the 10-county area under analysis, in addition to $727 million in output and more than $343 million in gross county product. The total estimated state revenue was $28 million, total severance tax $8 million, with a total of $77 million in royalties and an estimated lease payments of $16 million. The drilling and completion expenditures represented $150 million; followed by oil and gas production with $385 million. Estimated Impacts in Mitchell, 2012 Table 6-9 Economic Impacts Direct Indirect Induced Total Output $535,580,797 $158,967,588 $32,520,509 $727,068,894 Gross County Product $243,441,491 $80,836,530 $19,219,877 $343,497,898 Employment Full-Time ,348 Payroll $33,820,429 $23,179,189 $5,734,862 $62,734,481 Estimated State Revenue $28,792,324 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Mitchell, 2012 Table 6-10 Severance Tax $8,880,678 Royalties $77,072,313 Lease Payments $16,450,175 Drilling and completion $150,000,000 Oil and gas production $385,361,567 Source: CCBR Estimations using IMPLAN software version 3, database

115 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Mitchell County. In 2022, it is estimated that a total of 1,810 Mitchell County jobs were supported by the 10-county area under analysis, in addition to $1.1 million in output and more than $557 million in gross county product. The total estimated state revenue was $48 million, total severance tax $24 million, with a total of $202 million in royalties and an estimated lease payments of $9 million. The drilling and completion expenditures represented $87 million; followed by oil and gas production with $1 million. Estimated Impacts in Mitchell, 2022 Table 6-11 Economic Impacts Direct Indirect Induced Total Output $827,840,320 $200,693,401 $52,350,24 $1,080,883,968 Gross County Product $424,121,319 $102,012,596 $30,904,19 $557,038,109 Employment Full-Time ,810 Payroll $59,197,124 $30,792,170 $9,211,737 $99,201,031 Estimated State Revenue $48,360,245 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Mitchell, 2022 Table 6-12 Severance Tax $24,970, Royalties $202,630,785 Lease Payments $9,789,529 Drilling and completion $87,312,555 Oil and gas production $1,013,153,923 Source: CCBR Estimations using IMPLAN software version 3, database

116 Nolan County Overview of Nolan County One of the counties comprising of the West Texas Energy Consortium (WTxEC) area is Nolan County, which is located in the center of the WTxEC area. The following graphs and charts show population growth, total employment, the super sector natural resource and mining (NRM) employment, and the relationship among Nolan County, WTxEC area and the state of Texas. Nolan County lies along Interstate 20 and State Highway 84. The major city and seat is Sweetwater, with a population of 10,906. The only other town is Roscoe. Nolan County has established itself as a center wind power generation. Nolan County has established itself as a center for wind power generation. The county is named after Philip Nolan, one of the first American traders to visit Texas. Figure 7-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 116

117 Per Capita Income, Population, and Industries Nolan County has a population of 15,269. The per capita personal income is $32,914. The top three employments by industry are state and local government, retail trade, and manufacturing; with government and government enterprises being the top industry by earnings. Table 7-1 Nolan County Population 15,269 Per Capita Personal Income 32,914 Total Employment 6,576 State and Local Government Employment by Industry (Top 3) Retail Trade Manufacturing Government and Government Enterprises Earnings by Industry (Top 3) Manufacturing Retail Trade Sources: Bureau of Economic Analysis (BEA), Regional Accounts 117

118 Population Growth Comparison Population in Nolan County has decreased 3.7 percent during the twelve years between 2001 and Population growth in the WTxEC area is positive at 2.7 percent, but is far outpaced by the 22.2 percent growth rate of the state of Texas. Figure 7-2 Source: U.S. Census Bureau 118

119 Job Growth Comparison Total employment grew by 5.7 percent in Nolan County and 14.7 percent for the state of Texas between 2001 and Employment grew by 11.3 percent in the study area during this same period. The employment growth for Nolan County has been decreasing for the last two years. Figure 7-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

120 Natural Resource and Mining Employment Growth Comparison Employment in the natural resources and mining super sector increased by 51.2 percent for the state of Texas, and 74.5 percent for the study area between 2001 and In Nolan County, the employment for the super sector grew by 26.0 percent in that same period. Nolan County has followed a similar pattern as the rest of the region and state, however currently has the lowest growth rate among the three areas. Figure 7-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

121 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Nolan County and the study area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a much greater significance in the study area than that in Nolan County. Figure 7-5 Source: Texas Workforce Commission s Quarterly Census of Employment and Wages 121

122 Chart 7-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

123 Population Projections Population projections are an estimate of a future population. The following table projects Nolan County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Nolan County is projected by the year 2050 to see an overall increase in population of 16 percent, a 21.3 percent decrease in Anglo population, an 11.4 percent decrease in Black population, and an increase of percent in the Hispanic population. Table 7-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,802-10, , , % 10, % % 4, % % , % 9, % % 5, % % , % 9, % % 5, % % , % 9, % % 6, % % , % 9, % % 6, % % , % 8, % % 7, % % , % 8, % % 7, % % , % 8, % % 7, % % , % 8, % % 8, % % , % 8, % % 8, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 123

124 Total Employment Forecast for Nolan County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 7-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

125 Building Permits Nolan County had only one single family building permit in Table 7-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center 125

126 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Nolan County, 77.4 percent of its population has at least a high school diploma, and only 15 percent have completed their bachelor s degree. Table 7-5 County Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade 1, % Kindergarten % 9th-12th grade, no diploma % Elementary (grades 1-8) 1,650 44% High school diploma or equiv. 3, % High School (grades 9-12) % Some college, no degree 2, % College or graduate school % Associate degree % Total 3,753 Bachelor's degree 1, % Graduate or professional degree % Percent with high school diploma 77.4% Total 9,912 Percent with Bachelor's degree 15.0% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 126

127 Amounts Subject to State Sales Tax Nolan County s total sales subject to sales tax were $30,989,926 in the first quarter of 2010 with an increase to $38,651,388 by the first quarter of 2013, an increase of 24 percent. Below is a 10 year historical graph for Nolan County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 7-7 Source: Texas Comptroller of Public Accounts 127

128 County Budgets The following graph shows the revenues and expenditures for Nolan County. In 2009, their expenditures were higher than revenue, however in the last year; revenues have increased and left a net surplus. Their 2012 revenue was just over $7.7 million compared to their expenditures at $7.26 million. Figure 7-8 Source: Nolan County, Texas Budgets 128

129 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Nolan County, there was a 2.5 percent decrease in employment for all industries. The employment growth for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was construction with a 39.4 percent increase, and the industry with the highest negative growth in employment was professional, business and other services, with a percent change. Table 7-6 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Construction % Other Services % Natural Resources and Mining % Financial Activities Group % Leisure and Hospitality Group % Public Administration % Total, All Industries 6,183 6, % Education and Health Services 1,646 1, % Manufacturing % Information % Trade, Transportation, and Utilities 1,350 1, % Prof., Business, and Other Services % Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

130 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Nolan County can be seen below. When compared to the other 9 counties, Nolan County had the fifth highest percentage, at 35.4 percent, of employees who live within one of the 10-counties with active drilling. They had the sixth highest percentage of residents who work within the 10-county area. There are 5,915 people employed in Nolan County. A total of 3,820 work in Nolan and live within one of the 10-counties that are part of the study. The remaining 2,095 workers are employed in Nolan County but live outside the 10-county study area. Table 7-7 Commuting Patterns for Employees Number Percentage Live in 10-county area 3, % Live outside 10-county area 2, % Total 5, % Source: US Census Bureau s On the Map There are 7,503 workers who live in Nolan County. A total of 3,563 work In Nolan and live within the 10- county study area. The remaining 3,940 workers are employed in Nolan County but live outside the 10- county study area. Table 7-8 Commuting Patterns for Residents Number Percentage Work in 10-county area 3, % Work outside 10-county area 3, % Total 7, % Source: US Census Bureau s On the Map 130

131 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Nolan County. In 2012, it is estimated that a total of 1,640 Nolan County jobs were supported by the 10-county area under analysis, in addition to $556 million in output and more than 249 million in gross county product. The total estimated state revenue was $15 million, total severance tax $27 million, with a total of $33 million in royalties and an estimated lease payments of $19 million. The drilling and completion expenditures represented $214 million; followed by oil and gas production with $166 million. Estimated Impacts in Nolan, 2012 Table 7-9 Economic Impacts Direct Indirect Induced Total Output $380,906,917 $131,981,624 $43,940,065 $556,828,607 Gross County Product $154,659,932 $68,340,396 $26,337,613 $249,337,941 Employment Full-Time ,640 Payroll $33,178,182 $24,384,572 $8,596,727 $66,159,481 Estimated State Revenue $15,874,971 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Nolan, 2012 Table 7-10 Severance Tax $3,925,316 Royalties $33,209,881 Lease Payments $19,082,203 Drilling and completion $214,857,508 Oil and gas production $166,049,405 Source: CCBR Estimations using IMPLAN software version 3, database

132 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Nolan County. In 2022, it is estimated that a total of 3,714 Nolan County jobs were supported by the 10-county area under analysis, in addition to 1.5 million in output and more than $757 million in gross county product. The total estimated state revenue was $58 million, total severance tax $27 million, and a total of $246 million in royalties and an estimated lease payments of $13 million. The drilling and completion expenditures represented $188 million; followed by oil and gas production with $1.2 million. Estimated Impacts in Nolan, 2022 Table 7-11 Economic Impacts Direct Indirect Induced Total Output $1,087,981,103 $294,090,348 $102,698,666 $1,484,770,118 Gross County Product $545,299,051 $150,908,157 $61,723,344 $757,930,553 Employment Full-Time 714 2, ,714 Payroll $81,608,266 $60,110,320 $20,153,709 $161,872,295 Estimated State Revenue $58,077,909 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Nolan, 2022 Table 7-12 Severance Tax $30,025, Royalties $246,198,793 Lease Payments $13,977,013 Drilling and completion $188,231,131 Oil and gas production $1,230,993,967 Source: CCBR Estimations using IMPLAN software version 3, database

133 Reagan County Overview of Reagan County The following graphs and charts show population growth, total employment, the super sector natural resource and mining employment, and the relationship between Reagan County, the study area, and the state of Texas. Reagan County lies on U.S. Highway 67 and State Highway 137. The county seat is Big Lake, with a population of 2,885. The three other towns are Best, Stiles, and Texon. The County was named in honor of John Henninger Reagan, a U.S. Senator, U.S. Representative, and the first chairman of the Railroad Commission of Texas. Figure 8-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 133

134 Per Capita Income, Population, and Industries Reagan County has a population of 3,390. The per capita personal income is $37,180. The top three employments by industry are transportation and warehousing, mining, state and local government; with transportation and warehousing also being the top industry by earnings. Table 8-1 Reagan County Population 3,390 Per Capita Personal Income 37,180 Total Employment 2,258 Transportation and Warehousing Employment by Industry (Top 3) Mining State and Local Government Transportation and Warehousing Earnings by Industry (Top 3) Mining Government and Government Enterprises Source: Bureau of Economic Analysis (BEA), Regional Accounts 134

135 Population Growth Comparison Reagan County s population increased by 7.6 percent between 2001 and 2012 according to the U.S Census Bureau. This rate was higher than the 2.7 percent growth rate in the population of WTxEC study area, but lower than the 22.2 percent population growth in Texas. Figure 8-2 Source: U.S. Census Bureau 135

136 Job Growth Comparison Employment in Reagan County increased by 85 percent between 2001 and 2012, outpacing the 14.7 percent growth rate of Texas and the 11.3 percent growth rate of the WTxEC study area during the same period. Employment growth in Reagan County has been increasing steadily since the economic crash of Figure 8-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

137 Natural Resource and Mining Employment Growth Comparison Employment in the natural resource and mining sector has increased by 78.6 percent in Reagan County between 2001 and The WTxEC study area s 74.5 percent growth and the state of Texas s 51.2 percent growth in the sector have followed a similar pattern. Reagan County currently has the highest natural resource and mining employment growth rate in the WTxEC study area. Figure 8-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

138 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Reagan County and the study area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a much greater significance in Reagan County than that in the study area. Figure 8-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

139 Chart 8-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

140 Population Projections Population projections are an estimate of a future population. The following table projects Reagan County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Reagan County is projected by the year 2050 to see an overall increase in population of 44.7 percent, a 37.1 percent decrease in Anglo population, a 58.4 percent decrease in Black population, and an increase of percent in the Hispanic population. Table 8-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,326-1, , , % 1, % % 1, % 21 0% , % 1, % % 2, % % , % 1, % % 2, % % , % 1, % % 2, % % , % 1, % % 2, % % , % 1, % % 2, % % , % 1, % % 3, % % , % 1, % % 3, % % , % 1, % % 3, % % , % % % 3, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 140

141 Total Employment Forecast for Reagan County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Chart 8-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

142 Building Permits Reagan County has seen a fluctuation in the number of building permits in the last decade. Table 8-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center 142

143 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Reagan County, only 65 percent of its population has at least a high school diploma, and only 9.8 percent have completed their bachelor s degree. Table 8-5 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade % Kindergarten % 9th-12th grade, no diploma % Elementary (grades 1-8) % High school diploma or equiv % High School (grades 9-12) % Some college, no degree % College or graduate school % Associate degree % Total 845 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 65.0% Total 1,981 Percent with Bachelor's degree 9.8% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 143

144 Amounts Subject to State Sales Tax Reagan County s total sales subject to sales tax were $14,265,846 in the first quarter of 2010 with an increase to $30,312,067 by the first quarter of 2013, an increase of 112 percent. Below is a 10 year historical graph for Reagan County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 8-7 Source: Texas Comptroller of Public Accounts 144

145 County Budgets The following graph shows the revenues and expenditures for Reagan County. Their revenues soared in 2010, and their expenditures dropped in 2012, leaving a large net surplus for The expenditures for 2013 were $5.8 million, while amassing revenues of over $9.5 million. Figure 8-8 Source: Reagan County, Texas Budgets 145

146 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Reagan County, there was a negative 0.3 percent change in employment for all industries. The change in employment for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was the financial activities group with an increase of 32 percent, followed by natural resources and mining, with an increase of 24 percent. Table 8-6 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Financial Activities Group % Natural Resources and Mining % Trade, Transportation, and Utilities % Leisure and Hospitality Group % Construction % Public Administration % Other Services % Total, All Industries 2,111 2, % Education and Health Services % Prof., Business, and Other Services % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

147 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Reagan County can be seen below. When compared to the other 9 counties, Reagan County was eighth in percentage of employees who live within one of the 10-counties, at only 64.6 percent. They also had only the seventh highest percentage of residents who work within the 10-county area. There are 1,969 people employed in Reagan County. A total of 697 people work in Reagan and live within one of the 10-counties that are part of the study. The remaining 1,272 workers are employed in Reagan County but live outside the 10-county study area. Table 8-7 Commuting Patterns for Employees Number Percentage Live in 10-county area % Live outside 10-county area 1, % Total 1, % Source: U.S. Census Bureau s On the Map There are 1,337 workers who live in Reagan County. A total of 589 work in Reagan and live within one of the 10-county study area. The remaining 748 workers are employed in Reagan County but live outside the 10-county study area. Table 8-8 Commuting Patterns for Residents Number Percentage Work in 10-county area % Work outside 10-county area % Total 1, % Source: U.S. Census Bureau s On the Map 147

148 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Reagan County. In 2012, it is estimated that a total of 2,600 Reagan County jobs were supported by the 10-county area under analysis, in addition to $1.7 million in output and more than $817 million in gross county product. The total estimated state revenue was $61 million, total severance tax $27 million, with a total of $221 royalties and an estimated lease payments of $41 million. The drilling and completion expenditures represented $447 million; followed by oil and gas production with $1.1 million, and pipeline construction activity with $59 million. Estimated Impacts in Reagan, 2012 Table 8-9 Economic Impacts Direct Indirect Induced Total Output $1,614,016,036 $122,817,580 $34,753,824 $1,771,587,440 Gross County Product $733,465,353 $63,919,786 $20,588,250 $817,973,390 Employment Full-Time 1, ,600 Payroll $117,191,179 $28,737,978 $5,397,612 $151,326,769 Estimated State Revenue $61,339,986 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Reagan, 2012 Table 8-10 Severance Tax $27,435,931 Royalties $221,324,197 Lease Payments $41,015,769 Drilling and completion $447,543,515 Oil and gas production $1,106,620,987 Pipeline Construction $59,851,530 Source: CCBR Estimations using IMPLAN software version 3, database

149 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Reagan County. In 2022, it is estimated that a total of 5,131 Reagan County jobs were supported by the 10-county area under analysis, in addition to $4.4 million in output and more than $2.1 million in gross county product. The total estimated state revenue was $157 million, total severance tax $27 million, with a total of $800 in royalties and an estimated lease payments of $57 million. The drilling and completion expenditures represented $1 million; followed by oil and gas production with $4 million. Estimated Impacts in Reagan, 2022 Table 8-11 Economic Impacts Direct Indirect Induced Total Gross County Product $1,944,497,501 $135,975,805 $53,573,849 $2,134,047,156 Output $4,007,985,552 $261,630,182 $90,338,414 $4,359,954,148 Employment Full-Time 2,836 1, ,131 Payroll $320,883,734 $66,307,933 $14,043,229 $401,234,896 Estimated State Revenue $157,061,481 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Reagan, 2022 Table 8-12 Severance Tax $95,768, Royalties $800,075,391 Lease Payments $57,396,946 Drilling and completion $1,084,056,464 Oil and gas production $4,000,376,957 Source: CCBR Estimations using IMPLAN software version 3, database

150 Scurry County Overview of Scurry County The following graphs and charts show population growth, total employment, the natural resource and mining employment, and the relationship between Scurry County, the study area, and the state of Texas. Scurry County lies on U.S. Highways 84 and 180. Snyder is the only major city and the county seat with a population of 11,202. The only other town is Hermleigh, with only 345 residents. Figure 9-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 150

151 Per Capita Income, Population, and Industries Scurry County has a population of 16,919. The per capita personal income is $37,970. The top three employments by industry are mining, state and local government, and retail trade; with mining also being the top industry by earnings. Table 9-1 Scurry County Population 16,919 Per Capita Personal Income 37,970 Total Employment 7,372 Mining Employment by Industry (Top 3) State and Local Government Retail Trade Mining Earnings by Industry (Top 3) Government and Government Enterprises Construction Source: Bureau of Economic Analysis (BEA), Regional Accounts 151

152 Population Growth Comparison Scurry County s population increased 8.1 percent between 2001 and 2012 according to the U.S. Census Bureau. While population has grown at a higher rate on average in the state of Texas at 22 percent, Scurry County s population growth remained higher than the WTxEC study area s 2.7 percent growth average in all 12 years of the study period. Figure 9-2 Source: U.S. Census Bureau 152

153 Job Growth Comparison Employment increased 29.9 percent in Scurry County between 2001 and Scurry County s total employment has grown at a higher pace than the WTxEC region or state, and has been on a constant increase since Unlike Scurry County, the state of Texas and the study area s employment grew almost at the same pace, increasing by 14.7 percent and 11.3 percent, respectively, between 2001 and Figure 9-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

154 Natural Resource and Mining Employment Growth Comparison Job growth in the natural resources and mining super sector grew by 97.8 percent in Scurry County, surpassing the 74.5 percent growth rate in the study area and the 51.2 percent Texas state average in the super sector. Scurry County s employment of natural resources and mining has been growing at an extremely high rate since Figure 9-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

155 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Scurry County and the the area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a much greater significance in Scurry County than that in the study area. Figure 9-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

156 Chart 9-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

157 Population Projections Population projections are an estimate of a future population. The following table projects Scurry County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Scurry County is projected by the year 2050 to see an overall increase in population of 42.5 percent, a 15.7 percent decrease in Anglo population, a 30.7 percent decrease in Black population, and an increase of percent in the Hispanic population. Table 9-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change ,361-10,723-1,005-4, , % 10, % 1, % 5, % 89 0% , % 9, % % 6, % % , % 9, % % 6, % % , % 9, % % 7, % % , % 9, % % 8, % % , % 9, % % 9, % % , % 9, % % 10, % % , % 9, % % 11, % % , % 9, % % 12, % % , % 8, % % 13, % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 157

158 Total Employment Forecast for Scurry County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

159 Building Permits Scurry County saw a huge increase in building permits in the last decade. The number of single family building permits rose from three to fifty, while the number of building permits for 2-4 family units increased from zero to 34 in 2010, and stands at 40 in Table 9-4 Single Family Building Permits Year Units Source: Texas A&M Real Estate Center Table Family Building Permits Year Units Source: Texas A&M Real Estate Center 159

160 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Scurry County, 73.8 percent of its population has at least a high school diploma, and only 15.8 percent have completed their bachelor s degree. Table 9-6 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool % Less than 9th grade 1, % Kindergarten % 9th-12th grade, no diploma 1, % Elementary (grades 1-8) 1,793 42% High school diploma or equiv. 2, % High School (grades 9-12) 1, % Some college, no degree 2, % College or graduate school % Associate degree % Total 4,266 Bachelor's degree 1, % Graduate or professional degree % Percent with high school diploma 73.8% Total 10,986 Percent with Bachelor's degree 15.8% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 160

161 Amounts Subject to State Sales Tax Scurry County s total sales subject to sales tax were $145,296,851 in the first quarter of 2010 with an increase to $229,741,809 by the first quarter of 2013, an increase of 58 percent. Below is a 10 year historical graph for Scurry County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a four-quarter sales average. Figure 9-7 Source: Texas Comptroller of Public Accounts 161

162 County Budgets The following graph shows the revenues and expenditures for Scurry County. Their revenues and expenditures have been virtually even for the last three years, steadily increasing at the same rate. As of 2013, their revenues match expenditures at $10.7 million. Figure 9-8 Source: Scurry County, Texas Budgets 162

163 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Scurry County, there was a 14 percent increase in employment for all industries. The change in employment for the state of Texas for the same period was 3.26 percent. The industry with the highest growth was natural resources and mining with an increase of 38.5 percent, followed by manufacturing, with an increase of 26.6 percent. The financial activities group saw the biggest loss in employment with a 9.2 percentage decrease. Table 9-7 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Natural Resources and Mining 1,940 2, % Manufacturing % Other Services % Prof., Business, and Other Services % Total, All Industries 7,191 8,200 1, % Trade, Transportation, and Utilities 1,329 1, % Education and Health Services 1,241 1, % Information % Construction % Leisure and Hospitality Group % Public Administration % Financial Activities Group % Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

164 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Scurry County can be seen below. When compared to the other 9 counties, Scurry County had the fourth highest percentage, at 34.5 percent, of employees who live within one of the 10-counties with active drilling. They had the highest percentage of residents who work within the 10-county area. There are 6,015 people employed in Scurry County. Of the total of, 3,940 work in Scurry and live within one of the 10-counties that are part of the study. The remaining 2,075 workers are employed in Scurry County but live outside the 10-county study area. Table 9-8 Commuting Patterns for Employees Number Percentage Live in 10-county area 3, % Live outside 10-county area 2, % Total 6, % Source: U.S. Census Bureau s On the Map There are 5,380 workers who live in Scurry County. Of this total, of 3,586 work within the 10-county study area. The remaining 1,794 workers live in Scurry County but work outside the 10-county study area. Table 9-9 Commuting Patterns for Residents Number Percentage Work in 10-county area 3, % Work outside 10-county area 1, % Total 5, % Source: U.S. Census Bureau s On the Map 164

165 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Scurry County. In 2012, it is estimated that a total of 2,966 Scurry County jobs were supported by the 10-county area under analysis, in addition to $1.9 million in output and more than $985 million in gross county product. The total estimated state revenue was $85 million, total severance tax $27 million, with a total of $300 million in royalties and an estimated lease payments of $6 million. The drilling and completion expenditures represented $82 million; followed by oil and gas production with $1.5 million. Estimated Impacts in Scurry, 2012 Table 9-10 Economic Impacts Direct Indirect Induced Total Output $1,585,605,890 $236,526,238 $81,318,030 $1,903,450,159 Gross County Product $792,331,220 $141,032,026 $51,655,999 $985,019,245 Employment Full-Time 873 1, ,966 Payroll $67,856,345 $78,461,248 $19,027,118 $165,344,711 Estimated State Revenue $85,148,048 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Scurry, 2012 Table 9-11 Severance Tax $35,987,361 Royalties $300,635,428 Lease Payments $6,799,406 Drilling and completion $82,428,754 Oil and gas production $1,503,177,141 Source: CCBR Estimations using IMPLAN software version 3, database

166 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Scurry County. In 2022, it is estimated that a total of 1,208 Scurry County jobs were supported by the 10-county area under analysis, in addition to $564 million in output and more than $296 million in gross county product. The total estimated state revenue was $22 million, total severance tax $10 million, with a total of $89 million in royalties and an estimated lease payments of $5 million. The drilling and completion expenditures represented $79 million; followed by oil and gas production with $79 million. Estimated Impacts in Scurry, 2022 Table 9-12 Economic Impacts Direct Indirect Induced Total Output $406,017,164 $114,511,855 $44,144,703 $564,673,722 Gross County Product $201,962,651 $66,845,577 $28,150,986 $296,959,213 Employment Full-Time ,208 Payroll $30,937,943 $36,617,156 $10,924,724 $78,479,824 Estimated State Revenue Source: CCBR Estimations using IMPLAN software version 3, database 2011 $22,105,166 Estimated Expenditures in Scurry, 2022 Table 9-13 Severance Tax $10,851, Royalties $89,327,599 Lease Payments $5,356,919 Drilling and completion $79,563,473 Oil and gas production $446,637,996 Source: CCBR Estimations using IMPLAN software version 3, database

167 Sterling County Overview of Sterling County The following graphs and charts show population growth, total employment, natural resource and mining employment, and the relationship between Sterling County, the study area, and the state of Texas. Sterling County is located along U.S. Highway 87. The only town and county seat is Sterling City, with a population of 888. The county is named after W.S. Sterling, an early settler in the area. Sterling County is one of 30 prohibition, or entirely dry, counties in the state of Texas. Figure 10-1 Source: Selected GIS software provided by Caliper Corporation; Newton, MA. Center for Community and Business Research. 167

168 Per Capita Income, Population, and Industries Sterling County has a population of 1,158. The per capita personal income is $35,840. The top three employments by industry are mining, state and local government, and farm employment; with mining also being the top industry by earnings. Table 10-1 Sterling County Population 1,158 Per Capita Personal Income 35,840 Total Employment 526 Mining Employment by Industry (Top 3) State and Local Government Farm Employment Mining Earnings by Industry (Top 3) Government and Government Enterprises Farm Earnings Source: Bureau of Economic Analysis (BEA), Regional Accounts 168

169 Population Growth Comparison Population has decreased in Sterling County by 11.2 percent during the past twelve years. Population in the WTxEC study area by 2.7 percent and increased in the state of Texas by 22.2 percent during this same time. Figure 10-2 Source: U.S. Census Bureau 169

170 Job Growth Comparison Total employment in Sterling County grew by 20.7 percent between 2001 and 2012, although at an erratic pace. Employment growth in the WTxEC study area and the state of Texas have stayed consistent to relative to one another, increasing by 11.3 percent and 14.7 percent. Figure 10-3 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

171 Natural Resource and Mining Employment Growth Comparison Employment in the natural resource and mining super sector increased by 35.1 percent in Sterling County between 2001 and Growth in the sector has increased by 51.2 percent in the state of Texas and 74.5 percent in the WTxEC study area over the same period. Sterling County has followed a similar pattern as the rest of the region and state, but currently has the lowest growth rate in the sector. Figure 10-4 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

172 Location Quotients for Natural Resource and Mining Employment Location quotients are useful in determining the significance of a particular job sector in the local economy. This is determined by calculating the ratio of a particular job sector from the local economy with total jobs in the local economy, then comparing that to the same ratio for the state. A location quotient greater than 1.0 denotes a sector that has greater importance to the local economy than that for the state. A location quotient less than 1.0 signifies that the sector is less important to the local economy when compared to the state. Both Sterling County and the sutudy area report a location quotient greater than 1.0 between 2001 and The natural resource and mining super sector has a much greater significance in Sterling County than that in the study area. Figure 10-5 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

173 Chart 10-6 Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

174 Population Projections Population projections are an estimate of a future population. The following table projects Sterling County s population from The projections are divided by ethnicity, with a category for Anglo, Black, and Hispanic. Each category contains the percent change. Sterling County is projected by the year 2050 to see an overall decrease in population of 11.4 percent, a 35 percent decrease in Anglo population, a 1,100 percent increase in Black population, and a 32.2 percent increase in the Hispanic population. Table 10-2 Population Projections Year Total Change Anglo Change Black Change Hispanic Change Other Change , , % % 1 0.0% % 4 0.0% , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % , % % % % % Source: Texas Workforce Commission as computed in 2012 by The Office of the State Demographer for the State of Texas 174

175 Total Employment Forecast for Sterling County in In order to estimate the Total Employment Forecast we used percentages of the super sectors for each county using the forecasts for the corresponding Workforce Development Area (WDA) starting with the base year (2014) and forecasting every year in between through 2022 (2020 figure provided by TWC). For the period , it was assumed the same growth rate from previous years. Year Table 10-3 Total Employment Forecast Source: CCBR elaboration with Texas Workforce Commission s Forecasts for Workforce Development Areas (WDAs)

176 Educational Attainment Educational Attainment refers to the highest degree of education an individual has completed. In Sterling County, 72 percent of its population has at least a high school diploma, and 18 percent have completed their bachelor s degree. Table 10-4 Educational Attainment Type of School Number Percent Educational Attainment Number Percent Nursery school or preschool 6 2.5% Less than 9th grade % Kindergarten 4 1.7% 9th-12th grade, no diploma % Elementary (grades 1-8) % High school diploma or equiv % High School (grades 9-12) % Some college, no degree % College or graduate school 6 2.5% Associate degree % Total 237 Bachelor's degree % Graduate or professional degree % Percent with high school diploma 72.0% Total 796 Percent with Bachelor's degree 18.0% Source: Texas Workforce Commission s County Narrative Profile from the Socrates database 176

177 Amounts Subject to State Sales Tax Sterling County s total sales subject to sales tax were $1,295,571 in the first quarter of 2010 with an increase to $3,080,708 by the first quarter of 2013, an increase of 137 percent. Below is a 10 year historical graph for Sterling County of the amount of total sales subject to sales tax. The original values are in blue and the smoothed values in red. The smoothed values represent a t four-quarter sales average. Figure 10-7 Source: Texas Comptroller of Public Accounts 177

178 Employment Changes Between the fourth quarter of 2011 and the fourth quarter of 2012, for Sterling County, there was a 29.7 percent change in employment for all industries. This change is almost ten times the employment growth for the state of Texas, which for the same period was 3.26 percent. The industry with the highest growth was Construction with an increase of 103 percent, followed by trade, transport and utilities, with an increase of 30.8 percent. Table 10-5 Employment Changes by Sector Industry Sector 2011 Q Q4 Employment Change Percent Change Construction % Trade, Transportation, and Utilities % Total, All Industries % Natural Resources and Mining % Education and Health Services % Other Services % Public Administration % Prof., Business, and Other Services % Manufacturing n/a n/a n/a n/a Information n/a n/a n/a n/a Financial Activities Group n/a 33 n/a n/a Leisure and Hospitality Group n/a n/a n/a n/a Source: Texas Workforce Commission, Quarterly Census of Employment and Wages data, from 2001 to

179 Commuting Patterns Using LEHD mapping, the commuting patterns of residents and employees of the 10-county region shows where residents work and the employees live. The commuting patterns for Sterling County can be seen below. When compared to the other 9 counties, Sterling County had the second highest percentage, at 67.8 percent, of employees who live within one of the 10-counties with active drilling. They had the fourth highest percentage of residents who work within the 10-county area. There are 403 people employed in Sterling County. A total of 138 people work in Sterling and live within one of the 10-counties that are part of the study. The remaining 265 workers are employed in Sterling County but live outside the 10-county study area. Table 10-6 Commuting Patterns for Employees Number Percentage Live in 10-county area % Live outside 10-county area % Total % Source: U.S. Census Bureau s On the Map There are 463 people employed in Sterling County. A total of 150 work in Sterling and live within one of the 10-counties that are part of the study. The remaining 463 workers are employed in Sterling County but live outside the 10-county study area. Table 10-7 Commuting Patterns for Residents Number Percentage Work in 10-county area % Work outside 10-county area % Total % Source: U.S. Census Bureau s On the Map 179

180 Economic Impacts in 2012 The following table shows the estimated impacts of the shale activity on Sterling County. In 2012, it is estimated that a total of 275 Sterling County jobs were supported by the 10-county area under analysis, in addition to $178 million in output and more than $87 million in gross county product. The total estimated state revenue was $6 million, total severance tax $3 million, with a total of $24 million in royalties and an estimated lease payments of $2 million. The drilling and completion expenditures represented $28 million; followed by oil and gas production with $123 million. Estimated Impacts in Sterling, 2012 Table 10-8 Economic Impacts Direct Indirect Induced Total Output $152,025,329 $21,541,875 $5,364,261 $178,931,465 Gross State Product $72,415,199 $11,447,410 $3,399,443 $87,262,051 Employment Full-Time Payroll $8,231,845 $3,389,209 $618,558 $12,239,612 Estimated State Revenue $6,742,537 Source: CCBR Estimations using IMPLAN software version 3, database 2011 Estimated Expenditures in Sterling, 2012 Table 10-9 Severance Tax $3,260,652 Royalties $24,770,765 Lease Payments $2,193,357 Drilling and completion $28,171,502 Oil and gas production $123,853,827 Source: CCBR Estimations using IMPLAN software version 3, database

181 Economic Impacts in 2022 The following table shows the estimated impacts of the shale activity on Sterling County. In 2022, it is estimated that a total of 637 Sterling County jobs were supported by the 10-county area under analysis, in addition to $383 million in output and more than $186 million in gross county product. The total estimated state revenue was $12 million, total severance tax $7.1 million, with a total of $59 million in royalties and an estimated lease payments of $4 million. The drilling and completion expenditures represented $107 million; followed by oil and gas production with $298 million. Estimated Impacts in Sterling, 2022 Table Economic Impacts Direct Indirect Induced Total Output $326,368,008 $43,944,809 $12,936,602 $383,249,419 Gross County Product $155,107,484 $22,973,319 $8,179,714 $186,260,517 Employment Full-Time Payroll $27,146,911 $6,757,082 $1,490,626 $35,394,618 Estimated State Revenue Source: CCBR Estimations using IMPLAN software version 3, database 2011 $12,667,673 Estimated Expenditures in Sterling, 2022 Table Severance Tax $7,052, Royalties $59,778,471 Lease Payments $4,970,647 Drilling and completion $107,903,581 Oil and gas production $298,892,357 Source: CCBR Estimations using IMPLAN software version 3, database

182 Appendices Appendix A: County Budgets and Road Expenditures Road Infrastructure Expenditures in Active Counties of the West Texas Energy Consortium Fisher County s Fiscal Year 2013 budget of $5.1 million with $2.4 million allocated on Roads and Bridges expenditures. Over 50.4 percent of the Roads and Bridges account is reserved for Capital Outlay (Unit Cost). Of the total expenditures for the Road and Bridges Fund, $2.0 million is paid through revenue. Approximately, 60.5 percent ($1.2 million) of the revenue is comprised of Loan Income with 25.4 percent ($517,137.96) coming from Ad Valorem Taxes and 12.3 percent ($251,046.84) from Motor Vehicle Registration. Scurry County expends $3.2 million of its 2013 budget on the Roads and Bridges Fund, accounting for 29.0 percent of the total FY 2013 budget ($10.7 million). Three line items comprise of 69.9 percent of the account: Capital Outlay ($780,000; 24.6 percent); Precinct Payroll ($698,718; percent); and Road Materials and Construction ($735,000; 23.2 percent). The FY 2013 Road and Bridge Fund adequately finances the expenditure account. The majority of the fund originates from Ad Valorem taxes, which accounts for $2.2 million or 71.0 percent. The budget also has $400,000 from revenue ledger entitled Road and Bridge Fund (12.6 percent). With the inclusion of the Sale of Assets ($300,000; 9.5 percent), these three comprise 93.1 percent of the total General Fund for Road and Bridges. Howard County s FY 2013 Budget estimates an overall revenue stream of $10.9 million but lists expenditures totaling $11.8 million for a deficit of $912,985. Road and Bridge Fund expenditures account for $3.5 million of the budget with Paving/Sealcoating ($1.3 million; 37.7 percent), Salaries ($650,473; percent), Auto Operation Charges ($600,000; 17.0 percent), and Road Edge Repairs ($400,000; 11.3 percent) accounting for percent of ledger costs. The county estimates $2.8 million for collection for their Road and Bridge Fund. Almost three-quarters of the Road and Bridge Fund revenues come from current tax collections ($2.0 million; 74.7 percent) with another $400,000 or 14.2 percent is derived from Motor Vehicle Licenses and Permits. Nolan County passed a budget for FY 2013 listing $7.3 million in expenditures and $7.7 million in revenues. The county has a Road expenditure account totaling $1.8 million. The top 3 expenditures in the account are Salaries ($595,178.20; percent), Road Materials ($540,000; percent), and Health Insurance ($119,646; 6.66 percent). Nolan County has a revenue stream of $1.6 million for roads. Almost 98 percent of road revenue comes from Ad Valorem Tax ($1.0 million; 65.0 percent), Auto Licenses fees ($400,000; 24.8 percent), and County Road & Bridges Fees ($130,000; 8.1 percent). Nolan Count s accounting leaves a deficit of $185, in the account. 182

183 Appendix B: West Texas Consortium Hotel Occupancy Data The hotel occupancy rate measures the percentage of hotel rooms that are rented on an annual basis. From a year-to-year basis, there were several counties that had a significant increase the rate of occupancy in the WTxEC area. From 2009 to 2010, Reagan County had the only sizable increase in occupancy of ten percent. However, from 2010 to 2011, Martin County had a thirty-five percent increase. In that same year, Mitchell County s hotel occupancy rate increased 21.8 percent, Howard County s 19.2percent, and Nolan County s saw a 16.4 percent spike in occupancy. Most recently, from , we saw Howard County again, with a sixteen percent increase, Mitchell County at 15.3 percent, and Reagan County had a 12.8 percent spike in occupancy. When comparing these numbers to the overall state occupancy percentages, the only similarity is the decline virtually across the board from , presumably due to the economic collapse. Brown, Coleman, Martin, Nolan, Runnels and Taylor Counties had a decrease in hotel occupancy, however, all of the decreases were minute, with the largest being Runnels County at 2.4 percent. The County with the largest production of oil is Martin County, with 20,518,157 BBL being produced in This also happens to be the County that had just 1,553 hotel rooms sold in 2010, and saw those numbers skyrocket to 18,655 the very next year. Reagan County s large increase from could be a result of it being the leading casinghead producer with 47,338,826 MCF in