Despite the decrease in gas drilling in Johnson County, county residents shouldn’t expect drilling to remain stagnant, according to a Barnett Shale study conducted and released by the Fort Worth Chamber of Commerce.
Gas drilling activity has taken a big downturn in Johnson County, said County Judge Roger Harmon, causing the county to lose substantial tax base. But according to the study, Johnson County has only just begun to tap into its natural reserves.
In the study, A Decade of Drilling, The Texas Railroad Commission denotes four counties as the core production areas for gas drilling: Johnson, Denton, Tarrant and Wise.
According the study, Johnson County may soon strengthen its tax base, which could help commissioners shape future county budgets.
At its peak, the county had 76 drilling rigs. Today it has about six or seven. The lower drilling activity contributed to the tax base shrinking from $10.8 billion to $10.5 billion, forcing officials to cut the budget a little deeper this year, Harmon said.
“This year we’ll have a $460 million loss in our tax base and we’re going to have to do a lot of planning for our budgets next year,” Harmon said. “You just don’t know what natural gas prices are going to do.”
Natural gas, like many other fuel sources, is finite and subject to market forces and production and development and the Barnett Shale will continue to fluctuate over time, according to the report.
“In energy production, there always tends to be peaks and valleys, but the next peak should be quite large,” said Perryman Group’s President Ray Perryman. “We have studied the Barnett Shale’s activity, economic benefits and trends over the last 10 years, and the numbers are very impressive.”
However, there have been reports that drilling activity reached its peak in 2007 and 2008 and that The Perryman Group’s figures are questionable.
Perryman said the numbers and figure don’t lie and that jobs created and revenue generated through drilling activity is tangible proof.
Although exploration activity slowed during the economic downturn, gas production from drilling continues to rise. The report states shale activity includes $11.1 billion annual output and 100,268 jobs created in the region.
Shale activity benefits both state and local governments through property taxes, severance tax, enhanced retail sales and real estate development.
About 38.5 percent of the incremental growth in the economy of the region over the past decade has been the result of Barnett Shale activity, Perryman said.
The report concludes that only a small portion of total production has occurred to date in comparison to remaining reserves, and the shale is expected to continue to generate stimulus for Johnson County and the state for decades.
“The only thing that would cause that to happen would be if natural gas prices were to go up,” Harmon said. “If natural gas prices go up then I expect the gas companies to get more active. Until that happens the county will have to err on the caution side because you don’t know what natural gas prices are going to do year to year.”
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Study: Johnson County to see more drilling
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