Texas Tech Study Shows Long Lasting Benefits of Pipeline Development

In 2014, a 10-year impact analysis of the Texas pipeline industry by researchers at Texas Tech University found that pipeline development had the potential to greatly benefit the state. An updated analysis of the industry published last month shows that long-term economic benefits will far exceed even what was originally anticipated.

Few Texas industries can compare to oil and gas pipeline development in terms of raw economic impact and rate of growth. Since the original study concluded, the economic and employment impact of the industry has increased by 47% and 40% respectively. In 2019 alone, the industry provided over $48 billion in economic output, supported more than 238,000 jobs, and nearly $3 billion in state and local government revenues. Pipeline projects like the Permian Highway Pipeline and Lone Star Express expansion have supported thousands of jobs throughout construction, and will contribute millions in state and local tax revenues and safely and efficiently transport product to consumer markets.

The positive impact extends far beyond just pipeline construction. The broader oil and gas industry of the state depends on continued pipeline development, both to meet short-term transportation needs and to attract new long-term investments. The updated study finds that:

“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”

If such a system is developed, the industry’s economic output will only continue to grow:

“Over the next 40 years, the Texas pipeline industry is conservatively expected to generate cumulative economic impacts (in today’s dollars) of $1.49 trillion in economic output, $903 billion in additional gross state product, and contribute $84 billion in state and local government revenues.”

Much of that impact will be experienced where it is most needed and deserved. Every mile of pipeline is expected to generate an average of $380,000 for the county it runs through, and the number of local jobs supported by the industry will more than double over the same period.

The science is clear that the wide-ranging benefits of the pipeline industry should not be underestimated. Energy infrastructure development supports hundreds of thousands of well-paying jobs across Texas in all sectors of the economy. In the wake of COVID-19, it is crucial that those jobs and the prosperity they generate is protected and built upon. As the report concludes:

“Overall, the pipeline industry plays a vital and valuable role in both oil and gas activities and broader economies across Texas…The pipeline transportation system is a key component in the realization of value and the associated economic benefits that will come from the continued growth and expansion of the oil and gas industry.”

To continue capitalizing on such investment and economic opportunities, policymakers and regulators must foster an environment that is conducive to large-scale energy infrastructure investment.

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