This Is What Happens When Your Small Local Town Finds Oil (Hint: $)

In 2008, drilling companies discovered prodigious amounts of accessible crude under the Eagle Ford Shale formation in Southeast Texas. Development was derailed a bit due to the recession, but from 2010 to late 2011, the impact on local paychecks has been staggering. Average wages in the region have grown about 14 percent. Total wages shot up 25 percent. And in the top five earning counties in the area, they've grown 63 percent.  

Here's a graph of that transformation from new report by the Federal Reserve Bank of Dallas. Total wages are shown in the red line, job growth in the blue bars.

Texas_Eagle_Ford_Employment.PNG

The effect on jobs has been significant, if not quite as dramatic. Overall, employment grew by about 15,000 between 2010 and late 2011, or roughly 5.9 percent a year. It's not a giant leap from where the region was pre-recession, when it was mostly known for natural gas production.

So what does this tell us in the big picture? First, drilling will make a region wealthy, but it won't necessarily generate mass employment. Second, while gas may be a boon for a local economy, it's nothing compared to the riches oil will bring. Oil is considerably more profitable than natural gas. And with profits come paychecks.

Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well. Bestselling author Mark Bittman teaches James Hamblin the recipe that everyone is Googling.

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

How to Cook Spaghetti Squash (and Why)

Cooking for yourself is one of the surest ways to eat well.

Video

Before Tinder, a Tree

Looking for your soulmate? Write a letter to the "Bridegroom's Oak" in Germany.

Video

The Health Benefits of Going Outside

People spend too much time indoors. One solution: ecotherapy.

Video

Where High Tech Meets the 1950s

Why did Green Bank, West Virginia, ban wireless signals? For science.

Video

Yes, Quidditch Is Real

How J.K. Rowling's magical sport spread from Hogwarts to college campuses

Video

Would You Live in a Treehouse?

A treehouse can be an ideal office space, vacation rental, and way of reconnecting with your youth.

More in Business

Just In