According to new data from the Department of Energy, daily oil output in Texas reached a 24-year high in August, when the state produced more than 2 million barrels per day (bpd) for the first time since June 1988 (see chart above). Over the last three years, daily oil production in Texas has almost doubled, from just over 1 million bpd in August 2009 to more than 2 million bpd this year. Total oil output in the month of August surpassed 60 million barrels of crude oil for the first month since August of 1988, also reaching a 24-year high, and monthly crude oil production is now almost double the monthly oil output three years ago of 33 million barrels.
A comparison to North Dakota helps to put Texas oil production in perspective, because the increases in Texas oil output over the last three years have been about double the increases in North Dakota. Daily crude oil output in Texas has increased by almost 1 million bpd since August 2009 compared to only a 469,000 bpd increase in North Dakota crude oil, and total monthly output in Texas has increased by 29 million barrels over the last three years, compared to a 14.5 million barrel increase in North Dakota.
At the current exponential pace of production increases, it’s possible that within the next year Texas will surpass the output levels of the early 1980s of 80 million barrels of monthly oil output and 2.6 million bpd.
The oil boom in Texas is delivering a huge economic stimulus to the state’s economy, bringing new jobs, wealth and prosperity to the Lone Star State, here are some examples:
1. Over the last two years, the state’s oil and gas sector has been adding new energy industry jobs at a pace of almost 100 every business day, and the overall state economy has been adding payroll jobs at a rate of more than 1,000 new jobs every business day.
2. Since the recession ended in June 2009, the booming Texas economy has created 576,200 new jobs, which represents 18.6% of the total U.S. jobs created over that period, even though Texas’s share of the U.S. population is only 8%. Relative to its population, Texas has created new jobs during the economic recovery at more than twice the rate of job growth in the rest of the country.
3. Total Texas employment reached a new all-time high in September of 10.85 million payroll jobs, which is more than 2% (and 239,000 jobs) higher than the previous peak employment level reached during the 2007-2009 recession. So while the overall employment level in the U.S. remains more than 3% (and 4.5 million jobs) below its early 2008 peak, Texas re-gained all of the jobs lost during the recession by the end of 2011, and the employment level there today is higher by 239,000 jobs compared to the previous peak.
Bottom Line: Along with the gusher of new oil coming out of Texas oil fields at a 24-year high, especially in the Eagle Ford Shale area and the Permian Basis, is coming a gusher of new shovel-ready jobs, both direct and indirect, at a rate of more than 1,000 new jobs every business day in the Lone Star State. Although North Dakota has frequently been referred to as America’s “economic miracle state,” it’s now apparent that Texas also deserves that title, given the phenomenal growth in the state’s oil production and its incredible 1,000 per day rate of new job-creation.
Carpe oleum: Seize the oil!