Friends of mine have already gotten big checks for three years' permission to drill on their land, and if anything is found they stand to gain royalties of 20% on the proceeds, or more. It's fat city. That's one big reason why retail sales are up nationwide, according to Bloomberg, with car sales brisk and real estate prices rising.
And it's not just in Texas. There's Bakken oil coming out of North Dakota. Railroads are taking that oil out as fast as they can, and pipelines are moving up to meet it. Refiners have ample "crack spreads" even while prices at the pump fall. Companies that are drilling the Eagle Ford, and there are more than 200 of them in all, are being joined by dozens of pipeline and service companies. Some had billboards along the highways offering jobs. The roads and roadside stands along them are filled with happy, fat, prosperous faces.
Investors also have reason to smile. Cabot Oil & Gas ( COG), one of the major players in Eagle Ford, has more than tripled in price since 2010. Anadarko Petroleum ( APC), another big Eagle Ford player, has doubled in that time. Like this boom, the oil boom of the 1970s was fueled by high prices. It was concentrated at the center of the country, again much like this boom. Areas outside the oil patch suffered with stagflation, as many areas are suffering from slow growth now.