Eagle Ford Shale

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]

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]

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]

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 March 2018, it accounted for 12.5 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 fourth quarter 2017, it yielded 191,250 barrels per day.[2]

Eagle Ford Oil Production March 2018
	Barrels per day (thousands)	Year/year change (percent)
Eagle Ford counties	1,310.5	10.9
Rest of Texas	2,857.4	33.9
SOURCE: Energy Information Administration.

Top Oil-Producing Counties in Eagle Ford Fourth Quarter 2017
	Barrels per day (thousands)	Year/year change (percent)
Karnes	357.4	30.2
La Salle	191.3	22.7
De Witt	153.8	–3.5
SOURCES: Energy Information Administration; Railroad Commission of Texas; calculations by Federal Reserve Bank of Dallas.

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 percent per year since January 2010. As a result of these increases, the Eagle Ford now accounts for 6.7 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 60 percent since first quarter 2010. Webb County remains the largest natural gas producer in the region.[2]

Eagle Ford Natural Gas Production March 2018
	Cubic feet per day (billions)	Year/year change (percent)
Eagle Ford counties	6.6	11.1
Rest of Texas	16.2	7.5
SOURCE: Energy Information Administration.

Top Natural Gas-Producing Counties in Eagle Ford Fourth Quarter 2017
Webb	2.4	15.5
Dimmit	0.8	–0.9
Karnes	0.8	8.6
SOURCES: Energy Information Administration; Railroad Commission of Texas; calculations by Federal Reserve Bank of Dallas.

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 April 2018
	Number of rigs	Year/year change (percent)
Eagle Ford counties	88	–1.1
Rest of Texas	417	24.1
SOURCE: Baker Hughes.

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 Fourth Quarter 2017
	Employment (thousands)	Year/year change (percent)
Texas
Eagle Ford counties	357.1	2.4
Rest of Texas	11,813.8	1.9
SOURCE: Bureau of Labor Statistics.

Wages Fourth Quarter 2017
	Average weekly wage (dollars)	Year/year change (percent)
Texas
Eagle Ford counties	$797	4.7
Rest of Texas	$1,118	3.4
SOURCE: Bureau of Labor Statistics.

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.

Resources

• Energy Data Explanatory Notes and Resources
  Describes the methodology used to compute production for counties in the Eagle Ford.
• Oil Boom in Eagle Ford Shale Brings New Wealth to South Texas, Southwest Economy, Second Quarter 2012
  An article by Dallas Fed economists exploring the economic gains from production growth across the region.
• Energy Information Administration Drilling Productivity Report
  Monthly estimates of oil and gas production for the Eagle Ford and other U.S. shale plays.
• Railroad Commission of Texas
  Offers an overview of the region and detailed data on production and drilling permits.
• Center for Community and Business Research at the University of Texas at San Antonio
  Provides comprehensive reports studying the economic impacts of drilling in Eagle Ford counties.