This gall is caused by a slow growing fungus in the genus, Phomopsis. The woody gall is formed by the tree's natural wound response to fungal attack. To prevent wood decay, pecan trees try to grow over and seal out invading fungi. However, in the case of a Phompsis gall, neither tree nor fungus seem to gain the upper hand in the wood decay battle. As a consequence the gall just grows larger.
Looking at the underside of the gall, (held in my hand) you can see that the woody gall is composed of a jumbled up mix of bark, wood, and fungus tissues. You can also see that this gall actually started off as two round galls that later fused together when they began to touch.
Phomopsis galls are not that hard to find in native pecan groves and they seem to have zero impact on nut production.