Shale gas reviving DeWitt economy, industry


March 27, 2010 at 10:01 p.m.
Updated March 27, 2010 at 10:28 p.m.

A shale formation that belts South Texas is one of a few silver linings for the oil and gas industry and the Crossroads amid the recession.

Drilling activity in the Eagle Ford Shale extends northeast from Webb County on the U.S.-Mexico border to DeWitt County.

"You can see the Eagle Ford Shale is one of the most promising shale-gas plays in Texas," said Ursula Hammes, a research geologist. "It is one of the newest and most promising."

A recent spike in activity by companies that harvest natural gas from this pipeline helps the local economy, Cuero officials said.

County Commissioner Curtis Afflerbach welcomes the drilling activity, citing it as a major reason the county reduced taxes last year.

"There's always a good positive that comes out of that because it allows us to have an extra revenue base," Afflerbach said. "I would say, yes, it's a very big positive for the county."

Drillings rigs in the county are taxable property. Appraisal value, in general, increases with drilling activity.

In 2008, Louisiana-based Petrohawk Energy Corp. became the first to drill a well in the Eagle Ford. Since then, activity fluctuated. Companies pulled in and out of sites, responding to the ebb and flow of an already unstable industry.

Private companies such as Conoco-Phillips and Geosouthern moved into the area to capitalize on the growing shale-gas market.

Conoco-Phillips has two rigs in DeWitt County, Charlie Rowten, spokesman for the company, said.

Shelley Pennell, executive director of the Cuero Development Corp., said the presence of oil companies extends to beyond tax collection. It helped local commerce, she said.

"Certainly we see people staying in hotels and using services," Pennell said. "We can definitely see an impact on that side of things in town."

On the broader scale, the formation could become a pivot of domestic shale gas production, increasingly becoming more important to the U.S. natural resource supply.

Hammes is a manager for Project STARR, a University of Texas research organization concerned with oil and gas recovery. She said Eagle Ford seems to be a "very prolific" gas play.

Shale gas extraction typically uses a horizontal drilling method, first employed on the Barnett shale in the early 1980s.

Recent advances in the technology led to its proliferation, improving gas yields while also being relatively benign to the environment, according to the U.S. Department of Energy.

Because of the horizontal orientation, many holes can be drilled from a single location, reducing the amount of carbon emitted into the atmosphere.

Hammes said the one environmental concern may be water usage. Recovering shale gas means using hydraulic fracture, which facilitates the release of natural gas by stimulating the well area. The practice demands great amounts of water.

Errol Dietz, an attorney negotiating oil and gas leases in Cuero, said the Eagle Ford Shale is the source of excitement for many landowners in the area.

"People who hadn't leased in 50 years are getting leases," he said. "We have people that work so hard all their lives, and here at the end they're getting some really nice checks."



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