Eagle Ford oil and gas attracting foreign manufacturing to South Texas

Energy Tribune:

Corpus Christi has not seen this much excitement since Lyndon B. Johnson (LBJ) won the White House in 1964. And, perhaps there is even more at stake for the area than LBJ’s 1964 historic landslide. There’s oil and gas flowing again in Texas and plenty of it.

While Washington frets, waffles and stalls about the merits of hydraulic fracturing, “fracking,” its benefits are already playing out in Texas. And the multiplier in the economy is far larger than the nominal value of the produced oil and gas.

Since just last year the state’s Eagle Ford oil and gas shale deposits, one of the largest shale discoveries in the US, have generated some $61 billion in economic impact on the South Texas economy, more than doubling its impact from 2011. Better yet for Texas and indeed the entire country, it’s supporting more than 116,000 high-paying new jobs, with room for more.

According to a recent study by the University of Texas at San Antonio, Eagle Ford’s impact has the potential to double the region’s economy in nine years and quadruple it in the next 18 years. Corpus Christi is just 60 miles south of those shale deposits.

Not only is the impact being felt in the Lone Star state, it’s making its way across the Atlantic and even the Pacific. In the past year, more than $20 billon in investment has been announced in Corpus Christi from domestic and international companies that want to take advantage of the Port of Corpus Christi and the region’s proximity to Eagle Ford Shale resources.

The latest company entering the Eagle Ford Shale play is Voestalpine, an Austrian Steel company and international player with deep pockets. Voestalpine signed a lease in April, making its projected Corpus Christi plant the company’s largest foreign investment to date. The $700 million investment will produce 2 million tons of iron (hot briquetted and direct reduced) and will use natural gas from Eagle Ford to power the plant. 

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There is much more.  This is consistent with my earlier post indicating that foreign manufacturing is coming to the US to take advantage of low cost natural gas.  These people are spending big on new facilities, but the cost of gas will give them an early payback on their investment.  They are coming from both Europe and Asia.  It is also not surprising that they are locating their businesses in Texas with its low tax structure and reasonable regulations.