A new report from Texas Tech University (TTU) found, in 2019 alone, pipeline construction and operations in Texas had an economic impact exceeding $48 billion in the state.
TTU researchers also found pipelines supported over 238,000 jobs across the state in 2019, contributing $29.3 billion in gross state product (GSP), and providing the state government and municipalities with more than $2.7 billion in tax revenue.
The report, Update to the Economic Impacts of the Texas Oil and Gas Pipeline Industry, was conducted by the Centre for Energy Commerce at TTU and released in late October. The Texas Pipeline Association (TPA) commissioned the study.
Employment, Revenues Grow with Pipelines
Since the original study was published in 2013, pipeline mileage across Texas has increased 13.16 percent. Total output from pipeline operations and construction increased by 47 percent since 2013, state and local tax revenue increased by 68 percent, and employment increased by 40 percent. Employment directly related to pipeline transportation grew by 2.68 percent annually.
“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, Ph.D., the McLaughlin Endowed Chair of Free Enterprise and Professor of Energy Commerce in the Rawls College of Business at TTU, who prepared the study. “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.”
By 2060 the report estimates the pipeline industry in Texas will have generated almost $1.5 trillion in today’s dollars in economic output, $903 in additional gross state product, and $84 billion in additional state and local tax revenue. Further, the industry will also create or support more than 492,000 jobs by then.
“A pipeline system capable of effectively handling increased levels of oil and gas activity is necessary for oil and gas companies to find it economic to operate in Texas,” the report concludes. “From an economic standpoint, the ability to retain and attract oil and gas investments requires a pipeline system that can manage the flow of hydrocarbons in a timely and cost-effective manner.
“Accordingly, as shown in this study, the economic benefits attributable to the pipeline system are substantial in the state of Texas,” says the study. “Moreover, the upstream and downstream portions of the energy industry (i.e., exploration and production, refining activities, etc.) will generate even more economic benefits to Texas in the form of additional economic impacts provided that these companies have an efficient and effective way to transport their product.”
‘Essential Components of … Energy Infrastructure’
Pipelines are critical to Texas’ and the nation’s economic well-being, said Thure Cannon, president of the TPA, in a press statement issued when the report was released.
“Texas pipelines are an essential component of our energy infrastructure,” said Cannon. “It is clear from this…study that pipelines deliver the robust economic benefits that come from the continued growth and expansion of the oil and gas industry.
“And, with Texas as one of the fastest growing states in the nation, now more than ever we need pipelines to deliver the hydrocarbons that are used to make the more than 6000 petroleum byproducts we rely on every day, including fertilizer, flooring, perfume, vitamins, soap, clothing and so much more,” Cannon said.
Tim Benson (firstname.lastname@example.org) is a policy analyst at The Heartland Institute.