December 2020, Vol. 247, No. 12

Features

Study Shows Enormous Economic Benefits Of Texas Pipelines

P&GJ Staff Report  

Through ongoing operations and construction in 2019, the Texas oil and gas pipeline industry provided more than $48.6 billion in economic impact, supported more than 238,000 jobs and contributed an additional $29.3 billion in gross state product, a study shows.  

This study, according to a recent report by the Center for Energy Commerce at Texas Tech University and commissioned by the Texas Pipeline Association (TPA), went on to say the industry injected more than $2.7 billion in state and local government revenues.   

The study also found that of those state and local revenues, a typical Texas county receives an estimated $12,350 in property taxes per year for each mile of pipeline located in the county.   

“Texas pipelines are an essential component of our energy infrastructure,” said Thure Cannon, president of TPA. “It is clear from this update to the Economic Impacts of the Texas Oil and Gas Pipeline Industry study that pipelines deliver the robust economic benefits that come from the continued growth and expansion of the oil and gas industry.”   

The study also shows that over the next 40 years, the jobs impact attributable to the Texas pipeline industry will reach more than 492,000 people. In addition, the industry is projected to generate cumulative economic impacts of:  

• $1.49 trillion in economic output  
• $903 billion in additional gross state product  
• $84 billion in state and local government revenues  

Even with the changes in prices and industry cycles experienced over the last several years, the innovations and discoveries in both plays and technologies have given rise to increased production of oil and gas, and have led to additional demands on the pipeline system.   

“The activities of the Texas pipeline industry, which include the transportation of hydrocarbons from sources of exploration and production to refineries and end-users, are one vital component of the substantial job creation, investment and overall economic growth of the state’s economy,” said Bradley Ewing, professor of Energy Commerce in the Rawls College of Business at Texas Tech University. “Provided that the pipeline industry maintains effective transportation capabilities, it will continue to generate economic benefits that will likely impact Texas for years to come.”  

Other highlights of the study include:  

• Since the original Texas Tech TPA-commissioned economic impact study, which focused on 2013 figures, the Texas pipeline industry’s total output impact from operations and construction has increased by 47%, total employment by 40%, and state and local government revenues by 68%.  

• Pipeline mileage in Texas increased 13.16% from 2013 to 2019, with an average annual growth rate of 2.08%.  
• The number of employees in Texas whose employment is directly related to pipeline transportation increased by 2.68% per year from 2013 to 2019.  
• The price of West Texas Intermediate (WTI) in 2013 was $98.97/bbl and $57/bbl in 2019, with the price of natural gas (Henry Hub) at $3.73 in 2013 and $2.56 in 2019 per MMBtu.  
• Texas rig count was 843 at the end of the year in 2013 and 406 at the end of 2019.  
• Texas Real Gross Domestic Product grew at an annual rate of 3.35% from 2013 to 2019. 
• The value added to Texas Real Gross Domestic Product accounted for by the economic impact generated from the Texas pipeline industry was 1.2% in 2013 and over 1.6% in 2019.