Posted on Mon, Mar. 24, 2008

Boom town

By DOROTHY BLACKMAN

Over the past two years, the Barnett Shale has impacted the regions’ economic outlook in a number of ways. Still in the early stages, drilling leases alone have provided financial boosts in and around Fort Worth. Based on current conditions, the economic outlook remains positive for the city and surrounding area.

“The booming energy business is creating thousands of new jobs and business opportunities across the Barnett Shale region, which covers 18 counties and 5,000 square miles in North Texas,” said Ed Ireland, executive director of the Barnett Shale Energy Education Council (BSEEC.)

Non-profit, independent and educational in its mission, the BSEEC was established in 2007 to assist individuals with their questions and concerns about the Barnett Shale and its possible effects upon the community.

Thus far, said Ireland, the economic impact has been a positive one for residents, cities and local businesses.

“This activity in the Barnett Shale has already created an estimated 55,000-plus new jobs and will spur an additional 53,000 over the next 10 years, according to a 2007 economic study by The Perryman Group,” he said.

While some of these jobs are directly related to the oil and gas industry, others are a result of the stimulus to the communities served by these industries. According to the Perryman study, the “multiplier effect” as it is known, has had a significant impact on area retailers, as well as on the construction, food and hospitality sectors.

“According to the Dallas Federal Reserve Bank, in 2007, 28 percent of the jobs in the United States were created in Texas, with 57 percent coming from the natural resources and mining sector,” said Marilyn Gilbert, executive vice-president of marketing with the Fort Worth Chamber of Commerce.

“One of the reasons for Texas’ and more specifically the Barnett Shale region’s relative economic strength is that we are in the epicenter of the energy industry.”

This in turn, means additional tax dollars for local projects, including schools and parks, largely by way of a trust fund established by the Fort Worth City Council from bonuses, royalty payments and ad valorem revenues on city property. One such project is the recent Lake Worth revitalization plan.

As Mayor Mike Moncrief, in his 2008 State of the City Address noted, “More publicly owned facilities are also slated for improvements, not the least of which will be the dredging of Lake Worth, one of Fort Worth’s most underutilized natural resources.”

And, of course, many residents have personally benefited by way of drilling leases on their property. While some areas have yet to negotiate leases, signing bonuses on others have risen as high as $16,000 per acre, yielding some homeowners as much as $4,000 in upfront bonuses. Add to that possible future royalties of 10 to 20 percent and the economic advantage to residents is easy to see.

“Tens of thousands of private homeowners have leased their minerals, creating a new source of income,” said Moncrief.

While the full potential of the energy boom remains to be seen, it is clear that the city has already begun to reap its economic rewards.

Said Gilbert, “Energy is the bright star right now.”

Information for this article obtained in part through BSEEC Web site bseec.org, and State of the City Address delivered Feb. 2008 by Mayor Mike Moncrief and Richard Fisher, president of the Dallas Federal Reserve Bank, presentation Feb. 22, 2008.