Carpe Diem

The meteoric rise in Texas oil output continues and is one of the most remarkable energy success stories in US history

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The Energy Information Administration released new US crude oil production data today for the month of February by state, and one of the highlights of the monthly update is that oil output in America’s No. 1 oil-producing state – Texas – continues its phenomenal, meteoric rise. Here are some details of oil output in “Saudi Texas”:

1. Texas produced an average of 2.295 million barrels per day (bpd) of crude oil in February, which is the highest average daily output in the state in any month since April 1986, just two months short of 27 years ago (see chart above).

2. Amazingly, oil production in the Lone Star State has more than doubled in less than three years, from 1.142 million bpd in July 2010 to 2.295 million bpd in February 2013, which has to be one of the most significant increases in oil output ever recorded in the history of the US over such a short period of time. A million bpd increase in oil output in less than three years in one 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.

3. In just the last 16 months since October 2011, when the state produced 1.598 million bpd, Texas oil output has increased by almost 700,000 bpd to 2.295 million bpd in February, which is the equivalent of adding an entire new oil field the size of the North Dakota Bakken formation to the US oil supply (based on February production in the Bakken of 715,000 bpd).

4. The exponential increase in Texas oil output over roughly the last three years has completely reversed the previous 23-year decline in the state’s oil production that took place from 1986 to 2009 (see chart).

5. In mid-2009, Texas was producing less than 20% of America’s domestic crude oil. The recent gusher of unconventional oil being produced in the Eagle Ford Shale and Permian Basin areas of Texas, thanks to breakthrough drilling technologies, has recently pushed the Lone Star State’s share of domestic crude oil above 30% in each of the last 11 months, and up to 32% of America’s crude in each of the last three months (December, January, and February).

6. Texas oil output in February, at an average of 2.295 million bpd, was 25.3% greater than the combined 1.83 million bpd of US oil imports that month from all of the Persian Gulf countries (Saudi Arabia, Iraq, Kuwait, and Qatar). In fact, Texas oil output has exceeded Persian Gulf imports in each of the last seven months starting last August, something that has never happened before in the history of monthly EIA data for Persian Gulf imports going back to January 1993.

7. Oil output has increased so significantly in Texas in recent years that if it was considered as a separate oil-producing country, Texas would have been the 13th largest oil-producing nation in the world for crude oil output in December (most recent month available for international oil production data). At the current rate of increase in crude oil output in Texas, the state is on track to possibly produce almost 3 million bpd by the end of this year, which could move the state all the way up to No. 8 in the world for oil output by December (depending on output changes in the other countries this year).

8. The exponential increase in Texas oil production is bringing jobs and economic prosperity to the state. For example, over the last 12 months through March, payrolls in the state of Texas increased by 329,500 jobs, which was a 3.1% annual increase in the state’s employment level, more than twice the national increase in payroll employment of only 1.40% over that period. Every business day over the last year, almost 1,500 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. Texas created 17% of US payroll jobs over the last year, even though the state represents only 8.2% of the US population.

MP: The exponential increase in Texas oil production over the last several years is nothing short of phenomenal, and is a direct result of “petropreneurs” who developed game-changing drilling technologies in America that have now revolutionized the nation’s production of shale oil. For Texas oil output to double in less than three years and completely reverse a multi-decade decline, and increase so dramatically that it’s the equivalent of adding a new Bakken oil field to America’s oil output, has to be one of the most remarkable energy success stories in US history.

18 thoughts on “The meteoric rise in Texas oil output continues and is one of the most remarkable energy success stories in US history

  1. Not only that, but the rig count in Texas keeps rising. Investors believe they can make money at these prices.

    Gotta say, I don’t see how the “world is running out of oil” but “U.S. production is not sustainable” arguments mesh.

    If the “world runs out of oil” the price will go up from here–meaning profits for US producers.

    More likely is we enter a very long period of stagnant oil prices, like 1980 to 2000. But Us producers appear able to make money at $80 a barrel, so looks like domestic production will continue to rise….

  2. The fossil fuel warriors missed this when they came to power in 2008 … they did not see what was to come the next few years from fracking – If they really understood developments in technology, they would have anticipated this and passed legislation to throttle fracking (anyway they could have). Now that the genie is out of the bottle – and states like TX and ND and PA and others are enjoying an economic boom, it would be more difficult to stop this –

    I am wondering what the envirowhackos are planning

  3. “Texas created 17% of US payroll jobs over the last year, even though the state represents only 8.2% of the US population.”

    “oil is an energy source of the past.”

    ~Barack Obama

    • Never, EVER underestimate the fury of those that continue to be proven wrong – and worse. You ain’t seen nothing yet – when it comes to the “war on oil”. Fossil Fuels that are enabling the world’s poorest to live a decent life is just too much for the regressives. I remember a talk by Matt Ridley where he has a slide showing how different (“green”) the Dominican Republic is compared to Haiti (because of the use of fossil fuels).

      Fossil Fuel whackos consider the use of any source of energy by anyone else as evil (they used to talk about replacing coal with gas – and when that has happened they changed the goal posts) – If we can find a cheaper way to capture the sun’s energy, they will find something wrong with that also – It is important to really appreciate their philosophy – driven by the belief that humans are evil because we exist (except they and theirs)

  4. You mean Liberals talking points regarding Red States taking more from the Federal Govt than they pay in is total BS? Tell me it aint so…

  5. Note that the chart doesn’t show Texas oil production peaked around 1970 at levels considerably higher than today’s level. Going after expensive to get, energy intensive, lower energy containing shale oil (and deep water Gulf of Mexico) shows the low hanging fruit has been taken. See http://www.shalebubble.org for a geological perspective — not as much fun as a political rant, but it does have the advantage of looking at physical reality.

    Fracked wells don’t last as long as conventional oil and gas drilling wells. Welcome to the Peak Energy plateau, imposed by physical limits.

    • Fracked wells don’t last as long as conventional oil and gas drilling wells. Welcome to the Peak Energy plateau, imposed by physical limits.

      This is something that Mark and the cheerleaders have ignored. All they look at are the production levels because they assume that production would not take place if there were little profit to be made. If they actually looked at the numbers coming from the shale players they would find that there are no profits being made by the producers. The beneficiaries of all of the activity are workers, consumers, and taxing agencies, not the companies themselves.

  6. The output is about half what it was 40 in the sixties and the cost has increased to $90 instead of three or four.

    Also it is usual to start the Y axis of charts like this at zero, not 800,000. This is dishonest reporting.

  7. Vangel, do you really thing oil and gas companies are investing these countless billions in the Bakken, the Eagle Ford, the Barnett, and the Marcellus and NOT MAKING MONEY?? Don’t you think these companies know where to get a positive return. Where did this silly myth of “no return for the companies” come from? That’s insane.

    • Vangel, do you really thing oil and gas companies are investing these countless billions in the Bakken, the Eagle Ford, the Barnett, and the Marcellus and NOT MAKING MONEY?? Don’t you think these companies know where to get a positive return. Where did this silly myth of “no return for the companies” come from? That’s insane.

      What I ‘think’ does not matter. What matters is what is being reported in the SEC filings. And they show negative cash flows and exploding debt on the balance sheets. That would not be a problem if the production data supported the depreciation cost estimates that are being used but it does not. The data shows that depreciation costs are underestimated and that the producers will have to write down their balance sheet some time in the future.

      You have to keep in mind that the large majors do not need to make a profit from shale operations because they are looking for a way to hide their reserve depletion problem. The new SEC rules and the ability to use a 6:1 BTU based conversion factor allows that to happen.

  8. Life around the Permian Basin and Eagle Ford is crazy. Complete shortage of rooms and restaurant space. It’s great!!!! A new boom is happening just west of Abilene on the Cline Shale. Oddly’ our local nuclear plant is suffering due to low natural gas prices. (So are my Barnett shale royalties)

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