Gains will have a ripple effect in housing
However, a University of Texas at San Antonio researcher later said more information may be needed to bear out BBVA Compass' projections.
BBVA Compass' predictions assumes Mexico will purchase up to $10 billion a year in Texas energy-related goods and services and that the state's oil and gas companies' gains will have a ripple effect in housing, durable goods manufacturing, retail and recreation.
The projections also assume Mexico's economy will grow at least 0.8 percent from its energy reforms, and that there will be a smooth roll-out of the changes and adoption of new technologies.
“Faster economic growth at the border will narrow the socio-economic disparities between Texas' border cities and big metropolitan areas,” Karp said. “If these border towns effectively seize the opportunity, the Texas-Mexico border could see one of the (most) dramatic transformations in history.”
South Texas should garner sizable gains from Mexico's law change, initiated late last year.
“South Texas and the Mexican states of Tamaulipas, Nuevo León, and Coahuila have a combined (gross domestic product) of more than $300 billion,” he said. “If the energy reform adds an extra 1 percent to real GDP growth, the region would generate $60 billion in additional economic activity during the next 10 years.”
Others witnesses took a more conservative approach to gauging the potential impact of Mexico opening oil and gas exploration to foreign companies.