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Eagle Ford Shale

Oil and natural gas extraction is booming in Eagle Ford Shale. Recent advances in horizontal drilling technology allow companies to extract oil and natural gas from shale, bringing new jobs and growing wealth to many rural communities in South Texas. Using the tabs below, learn more about the growth in oil and natural gas production across the region and its effects on employment, income and economic activity.

The Region

Highlights

According to the Energy Information Administration, the currently defined boundaries of the Eagle Ford Shale formation fall within a 23-county region.

During first quarter 2018, six counties produced 80 percent of Eagle Ford's oil: Karnes, Gonzales, DeWitt, LaSalle, McMullen, and Dimmit. Karnes, Dimmit, LaSalle and DeWitt counties also produce a large portion of the region's natural gas. Webb county is by far the region's largest producer of natural gas, with production averaging 2.4 billion cubic feet per day in first quarter 2018.[1]

Location of the eagle ford shale Oil production regions in eagle ford shale Gas production regions in eagle ford shale

Note

  1. For more information on how these production numbers are calculated, see Energy Data Explantory Notes and Resources.

History

The Eagle Ford Shale forms an arc across 20,000 square miles in South Texas. It begins in Laredo near the Mexico border, and extends 400 miles northeast between Austin and Houston. The formation is divided into three zones, commonly referred to as windows (Chart 1). The northernmost window contains oil. The southernmost contains natural gas. And the central window contains natural gas liquids, such as ethane, propane and butane, which are used to produce a variety of industrial products.[1]

Oil, Natural Gas Liquids and Natural Gas Windows in Eagle Ford Shale

These distinct windows are essential to the Eagle Ford’s current success. Initially, drillers in the region exploited its natural gas resources. But after natural gas prices began falling in 2008, they transitioned their production to the regions rich in oil and natural gas liquids, where favorable prices continue(Chart 2).[2]

Prices for Crude Oil, Natural Gas Liquids, and Natural Gas

Petrohawk Energy Corp. completed the Eagle Ford’s first well in October 2008. This natural gas well in La Salle County was very successful, producing 7.6 million cubic feet of natural gas per day.[3] The recession and declining prices interrupted development in 2009; activity picked up again in 2010. The Texas Railroad Commission issued 1,010 permits in 2010, up from just 92 permits in 2009 (Chart 3). Growth continued at a rapid pace, and in 2013, oil production in the Eagle Ford reached 1 million barrels per day.[4]

Drilling Permits Issued in Eagle Ford

Small, rural communities make up most of the counties in the Eagle Ford. The shale revolution has brought significant changes to local economies. The boom has created thousands of jobs and generated millions of dollars of government revenue, and there’s no sign of it stopping anytime soon.[5] Companies have invested billions to expand transport capacity to Gulf Coast refineries, and estimates from the Energy Information Administration suggest the Eagle Ford still contains 20.8 trillion cubic feet in technically recoverable natural gas and 3.4 billion barrels in technically recoverable oil.[6] With the diversity of its resources and its close proximity to the coast, the Eagle Ford is poised to continue producing for many years to come.

Notes

  1. For more information on natural gas liquids and their many uses, see What Are Natural Gas Liquids and How Are They Used?, Energy Information Administration, April 20, 2012.
  2. Oil Boom in Eagle Ford Shale Brings New Wealth to South Texas, Southwest Economy, Second Quarter 2012.
  3. Eagle Ford Information, Railroad Commission of Texas.
  4. Drilling Productivity Report, Energy Information Administration.
  5. University of Texas at San Antonio Eagle Ford Shale Economic Impact for Counties with Active Drilling, October 2012.
  6. Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays, Energy Information Administration, June 2011.

Oil Production

Highlights

Oil production growth in Eagle Ford began accelerating in 2010. Production in the region approximately doubled every year between 2010 and 2013. Since 2015, production has come down but remains significantly higher than in 2010. The share of U.S. oil produced in the Eagle Ford has also grown rapidly. In January 2010, the Eagle Ford produced just 1 percent of U.S. oil, but in June 2018, it accounted for 12.9 percent of the nation's oil production.[1]

The pace of production growth has varied across the counties in the Eagle Ford. Some counties have experienced especially dramatic growth. For instance, in first quarter 2010, La Salle county produced only 538 barrels per day, but by first quarter 2018, it yielded 207,853 barrels per day.[2]

Eagle Ford Oil Production
June 2018
  Barrels per day
(thousands)
Year/year change
(percent)
Eagle Ford counties 1,374.4 17.9
Rest of Texas 3,035.9 35.0
SOURCE: Energy Information Administration.
Monthly Oil Production in Eagle Ford and Rest of Texas Share of U.S. Oil Produced in Eagle Ford
Top Oil-Producing Counties in Eagle Ford
First Quarter 2018
  Barrels per day
(thousands)
Year/year change
(percent)
Karnes 343.4 16.5
La Salle 207.9 31.7
De Witt 125.9 –34.3
SOURCES: Energy Information Administration; Railroad Commission of Texas;
calculations by Federal Reserve Bank of Dallas.
Annualized Percent Change in Oil Production Across Eagle Ford Counties Quarterly Oil Production in Eagle Ford, by County

Notes

  1. Overall production for the Eagle Ford comes directly from the Energy Information Administration's Drilling Productivity Report.
  2. Data from the Energy Information Administration's Drilling Productivity Report is combined with county-level production data from the Railroad Commission of Texas to estimate county-level production. For more information on how these series are computed, see Energy Data Explanatory Notes and Resources.

Natural Gas Production

Highlights

Natural gas production in the Eagle Ford has increased an average of 18.7 percent per year since January 2010. As a result of these increases, the Eagle Ford now accounts for 6.8 percent of all U.S. natural gas production.[1]

As with oil production, the growth rate of natural gas production has varied substantially across counties in the Eagle Ford. Natural gas production has grown fastest in Gonzales and Dimmit counties, which have recorded annual increases of over 55 percent since first quarter 2010. Webb County remains the largest natural gas producer in the region.[2]

Eagle Ford Natural Gas Production
June 2018
  Cubic feet per day
(billions)
Year/year change
(percent)
Eagle Ford counties 6.7 7.4
Rest of Texas 17.3 11.9
SOURCE: Energy Information Administration.
Monthly Natural Gas Production in Eagle Ford and Rest of Texas Share of U.S. Natural Gas Produced in Eagle Ford
Top Natural Gas-Producing Counties in Eagle Ford
First Quarter 2018
  Cubic feet per day
(billions)
Year/year change
(percent)
Webb 2.4 17.2
Karnes 0.9 13.6
Dimmit 0.7 –3.5
SOURCES: Energy Information Administration; Railroad Commission of Texas;
calculations by Federal Reserve Bank of Dallas.
Annualized Percent Change in Natural Gas Production Across Eagle Ford Counties Quarterly Natural Gas Production in Eagle Ford, by County

Notes

  1. Overall production for the Eagle Ford comes directly from the Energy Information Administration's Drilling Productivity Report.
  2. Data from the Energy Information Administration's Drilling Productivity Report is combined with county-level production data from the Railroad Commission of Texas to estimate county-level production. For more information on how these series are computed, see Energy Data Explanatory Notes and Resources.

Drilling Activity

Highlights

The rig count in the Eagle Ford increased steadily from mid-2009 to mid-2012. In June 2009, only 30 rigs operated in the Eagle Ford; by June 2012, the number of active rigs had soared to 312. The rig count leveled off in mid 2012, hovering between 280 and 310 rigs until December 2014, when the number of rigs began to decrease in response to falling oil prices.

While the number of rigs in the Eagle Ford was stable until 2014, the number of wells per rig has continued to increase. In first quarter 2012, there were an average of 3.74 wells per rig in the Eagle Ford, rising to 5.6 wells per rig in fourth quarter 2014. However, recent production increases in the Eagle Ford can be also be attributed to an increase in the productivity of each rig in the region rather than an increase in the number of rigs.

Rig Count
June 2018
  Number of rigs Year/year change
(percent)
Eagle Ford counties 93 3.3
Rest of Texas 432 15.5
SOURCE: Baker Hughes.
Rig Count in Eagle Ford Shale Average Number of Wells Per Rig in the Eagle Ford

Labor Markets

Highlights

Employment growth in some Eagle Ford counties has approached 10 percent per year since the start of 2010. While wages in the rural counties of Eagle Ford remain lower than in the rest of Texas, their growth is robust. In most counties in the region, annualized wage growth has surpassed that in the rest of the state since the first quarter of 2010.

Employment
First Quarter 2018
  Employment
(thousands)
Year/year change
(percent)
Texas
Eagle Ford counties 356.2 2.4
Rest of Texas 11,748.9 2.0
SOURCE: Bureau of Labor Statistics.
Annualized Percent Change in Employment Across Eagle Ford Counties Average Weekly Wages in Eagle Ford and Rest of Texas
Wages
First Quarter 2018
  Average weekly wage (dollars) Year/year change
(percent)
Texas
Eagle Ford counties $787 5.0
Rest of Texas $1,180 3.9
SOURCE: Bureau of Labor Statistics.
Annualized Percent Increase in Average Weekly Wages Across Eagle Ford Counties

Business Activity

Highlights

Taxable sales in Eagle Ford increased sharply from 2010 to 2014. Growth varies across Eagle Ford counties, but most have outperformed the rest of the state.

Taxable Sales
Fourth quarter 2015
  Sales
($ billions)
Year/year change
(percent)
Eagle Ford counties 2.6 –13.5
Rest of Texas 94.0 –4.5
SOURCE: Texas Comptroller of Public Accounts.
Taxable Sales in Eagle Ford Counties and Rest of Texas Annualized Percent Increase in Taxable Sales Across Eagle Ford Counties

Resources

Energy in the Eleventh District