Eagle Ford Oil and Gas Reshapes the Coastal Bend Economy
Oil and gas from the Eagle Ford Shale play is transforming the Coastal Bend economy by attracting foreign investment and ushering in an industrial manufacturing boom.
For decades, imported oil products coursed through pipelines from Port Corpus Christi to other parts of Texas, but now that trend is reversing as petroleum exports hit a record high. In 2013, Port Corpus Christi marked a major milestone: It was the first year the Port saw more goods exported than imported, thanks to a surge in outgoing shipments of crude oil.
“In a span of 15 months, we went from virtually no exports to exporting more than we import,” says Roland Mower, President & CEO of Corpus Christi Regional Economic Development Corp.
Propelling the Port’s stream of exports is an oil and gas production boom driven by development in the Eagle Ford Shale, a geological formation in South Texas that offers an enormous quantity of natural gas and oil. Its activity is bringing jobs and revenue across the 12-county Coastal Bend Region, creating economic opportunities that promise to bolster the area’s economy for years to come.
Oil and gas producers are building new pipelines from the Eagle Ford area to the Port and reversing the flow of existing pipelines, while global companies are pouring billions of dollars into facilities in and around Corpus Christi to tap into raw materials coming out of the Eagle Ford.
“Having a long-term, steady supply of natural gas to feed the manufacturing process – and having it in close proximity to a port with a 45-foot ship channel – is very attractive for a lot of companies,” Mower continues.
Along with its rich resources and infrastructure, the region’s competitively priced workforce, abundance of undeveloped land and long-term political stability, especially compared to other oil and gas producing locations, is also catching the eye of industrial manufacturers, many with overseas headquarters.
Foreign Investment Fuels Expansions
Those multinational companies include China’s TPCO America Corporation, which is constructing a $1.3 billion, 1.6-million-square-foot facility to manufacture seamless pipe, as well as Austrian steelmaker voestalpine, which recently broke ground on a $700 million direct reduction plant that will produce 2 million tons of hot briquetted iron per year to use as feedstock to make its high-quality steel grades. Italian owned chemical manufacturer M&G Chemicals is also investing $750 million to build a pair of plants on the port’s Inner Harbor, one of which will manufacture PET, a polymer used to make packaging containers.
The Port is responding in kind by adding capacity to handle product.
“We’re investing $46 million in a new rail yard, and there will be 10 or 12 new docking facilities coming online in the next 12 to 18 months,” says John LaRue, executive director of the Port of Corpus Christi Authority. Plans are also underway to replace the Harbor Bridge, which spans the Port’s entrance. The $700 million project will “raise the clearance of the bridge from 138 feet to over 200 feet and remove some restrictions on vessels being able to get into the inner harbor,” LaRue says.
Other Emerging Industries
Local economic growth hasn’t been limited to the oil, gas and industrial manufacturing sectors.
“If you look at the jobs created over the last five years, most are related to the development of the Eagle Ford and things like drilling the wells, building pipelines and moving product in and out of well sites,” Mower says. “Over the next five years, we think growth in the region is going to be driven by large capital projects, particularly in construction. But we’re seeing job growth in all sectors.”
That includes the defense industry, which has long been a major component of the region’s economy. For example, the Corpus Christi Army Depot, the largest rotary wing repair facility in the world, expects to hire more than 1,000 new employees in the next three years – a 14 percent increase in employment.
Additionally, the region is celebrating the arrival of a handful of companies in technology-based industries, including Directions in Research, a market research/public opinion polling organization that has leased 8,000 square feet in Corpus Christi to house 200 employees.
For his part, Dr. Jim Lee, Chair of the Department of Decision Sciences and Economics at Texas A&M University-Corpus Christi, marvels at the changes he’s witnessed in just the past three years and predicts even more prosperity ahead.
Going forward, “we are going to create a lot of manufacturing jobs,” Lee says. “Manufacturing has gone through a long downtrend, but that trend is going to be reversed in South Texas.”
Learn more about Coastal Bend’s business climate.