Led by Shale, Texas Oil Production Continues to Soar
Texas has once again stunned the world by hitting its highest monthly rate on record for oil production, thanks to booming shale development and technological advancements such as hydraulic fracturing and horizontal drilling. According to the U.S. Energy Information Administration, the state pumped 2.7 million barrels of crude per day during September, which marked a 30 percent jump over September 2012 and is the highest average since monthly record-keeping began in January 1981.
If that’s not impressive enough on its own, Texas produced 35 percent of all U.S. crude oil in September. This figure is remarkable given that, in 2009, Texas was producing less than 20 percent of America’s crude. If Texas were its own nation, it would have been the 10th largest oil-producing nation in July.
The phenomenal energy development can be attributed heavily to the Eagle Ford Shale in South Texas and the Permian Basin in West Texas, two of the most significant and prosperous fields in Texas. Each of these regions produces more than one million barrels of crude oil per day. In turn, the growth in production brings economic prosperity to the state and counties in which oil production is booming.
According to a report by Mark Perry at the American Enterprise Institute, “over the last 12 months through October, payrolls in the state of Texas increased by 267,400 jobs, which was a 2.40% annual increase in the state’s employment level, compared to 1.74% increase in US payrolls over that period.” The economy of Texas has never been stronger, and each day it continues to grow. Perry adds:
“Every business day over the last year, more than 1,000 new jobs were created in the Lone Star State, and many of those jobs were directly or indirectly related to the state’s booming oil and gas industry, which experienced a 5.5% increase in payrolls (15,000 new jobs) over the most recent 12-month period through October.”
The great news is the growth doesn’t seem to be slowing down. According to the Federal Reserve Bank of Dallas, “oil and gas companies in Texas and nearby states are expecting continued growth next year.” The continued growth means more local and state infrastructure projects completed, increases in paychecks, direct and indirect jobs created, and of course enhanced energy security.
As we’ve said again and again, the recent boom in Texas and the United States is a product of responsible shale gas and oil development. And yet, for some reason, there are still skeptics who believe the “shale bubble” theory that the production is not economical.
But if companies thought shale was a losing bet, then why is one of the world’s largest energy companies making $16 billion in investments to develop shale?
That’s what one has to ask after a recent report highlighted the fact that ConocoPhillips “is planning to make $16.7 billion in capital expenditures to boost drilling in U.S. shale plays, including the Eagle Ford.” According to the report, ConocoPhillips will invest about $870 million into exploration of North American shale plays, including in the Permian Basin, the Niobrara Chalk in Nebraska and the Duvernay Shale in Canada.
Not only is ConocoPhillips planning on making huge investments in shale, but its production is scheduled to reach an average of 1.6 million barrels of oil equivalent per day in 2014, “driven by growth in the Eagle Ford, the Bakken and its conventional plays in the Permian Basin.”
As Mark Perry highlights:
“1.35 million bdp [barrels per day] increase in oil output in only 29 months in one U.S. state is remarkable, and would have never been possible without the revolutionary drilling techniques that just recently started accessing vast oceans of Texas shale oil in the Eagle Ford Shale and Permian Basin oil fields.”
And so Texas does it again – raising the bar for shale development, beating production records, and creating a heckuva lot of economic prosperity in the process.