BiggerPockets

The Barnett Shale - Investing in Fort Worth, TX

Friday, October 10

Here is an article I thought was of vital importance to our investments in the Metroplex. It is one of many professional articles providing documentation on the large growth of population, the strong economy, and the rapid job growth experienced in Fort Worth. These are the main reasons why we at Nationwide focused on this area for our investments and believe you should to!

Editorial of the New York Sun, July 25, 2008

As the Congress considers whether to follow President Bush's lead in repealing the decades-old moratorium on drilling for oil on the Outer Continental Shelf and in the Arctic National Wildlife Refuge, it might want to take a look at what's happening in the Barnett Shale region in TEXAS. The recent history of the Shale, where innovative energy companies have turned a once impenetrable rock formation into the most important natural gas source in America, provides a testament to the professional competence of the engineers and geologists who find and obtain the energy resources that make America's economy possible. It also illustrates just how irrational the Congress's persistent opposition to drilling has become.

In addition to being the largest onshore natural gas field in America, the Barnett Shale sits directly on top of the Dallas-Fort Worth metropolitan area, which is home to 6 million people. Companies are drilling for natural gas underneath schools, underneath the Dallas-Fort Worth International Airport, and underneath residential communities, and the process so far has been a resounding success. The Shale is producing at rates that have exceeded all expectations, and it's being done in a major American city without disturbing the residents who live there. Surely the reindeer in the Arctic National Wildlife Refuge, on whose behalf much of the resistance to drilling in that area is based, are as amenable to the process of drilling for resources as the citizens of Fort Worth.

Meanwhile, the Shale's economic impact on central Texas is a reminder that oil and natural gas are not just fueling energy addiction and pollution; these resources also create wealth. While the national economy is suffering, central Texas is experiencing a veritable boom. The annual economic impact of the Shale is $22 billion, according to a study by the Perryman Group. The Shale has also generated nearly three-quarters of a billion dollars in local and state tax revenues, and has created nearly 100,000 jobs with more on the way. It's made a few billionaires, more than a few millionaires, and lifted thousands of fortunate men and women into sudden affluence. Would not a rational Congress rather these rewards accrue to Americans rather than our enemies in the Middle East?

Only a few years ago, drilling for the gas in the Barnett Shale was considered virtually impossible. "It is far more complicated to extract natural gas from shale than from other sources of natural gas, like sandstone," a spokesmen for Devon Energy, Chip Minty, said. Devon Energy has been active in the Shale since 2002, but until recently other companies have shied away from the area. Exxon Mobil, for instance, was late in buying an interest in the Barnett Shale even though its global headquarters is only a few miles away. Geologists and energy companies have known about the vast natural gas deposits in the Shale for decades, but the tight, almost impermeable nature of shale, a black rock formed from organic deposits 300 million years ago, made drilling there economically infeasible. A few decades of trial and error and a couple of visionary technological innovations later, and the Shale has become the most important natural gas field in America. The history of the Shale, Mr. Minty said, "shows the potential for energy resources across America."

Will Barnard - Managing Partner, Nationwide Property Investments, LLC

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