By Matt Patterson, January 27, 2022
There is good news coming out of the oil and gas industry in Texas. The state is doing its part to ensure that both Texas and the nation have an adequate oil supply through the winter. In November, Reuters reported that “Crude oil production from the Permian Basin, the largest U.S. oil field, was set to surpass its pre-pandemic record in December, a swift turnaround that has not been replicated in the country's other oil regions.”[i] After a drop in output in 2020 during the pandemic, oil production around the country has begun to return, albeit at a fairly slow pace. But Texas, which produces more than four times the amount of oil than any other state in the union, has made a concerted effort ramp up production in order to meet demand:
The Permian is the primary driver of U.S. output, but its percentage of U.S. overall production is even more than at the end of 2019, when the United States was producing 13 million barrels a day. December's forecast production will surpass the previous record of 4.913 million bpd set in March 2020, according to a monthly forecast from the U.S. Energy Information Administration.[ii]
In the midst of global energy uncertainty and regressive policy decisions from the federal government (which, ironically, have led to the current administration begging foreign cartels for more oil production), Texas is committed to remaining the nation’s energy leader while increasing the state’s economic prosperity. In 2019, the Permian Basin surpassed Saudi Arabia’s Ghawar oil region as the top producing oilfield in the world. Texas has the second largest oilfield in the United States as well with the Eagle Ford Shale in South Texas.[iii] Overall, the state produced 1.78 billion barrels of oil in 2021. This production dwarfs the second highest producing state in the U.S., North Dakota, which produced roughly 430 million barrels in 2021.[iv]
It’s not just the increases in production, however, that merit attention. Innovation and efficiency in the oil and gas industry has led to development techniques that “have reduced costs and made energy production more environmentally-friendly.”[v] According to the U.S. Energy Information Administration, methane emission from the Permian Basin dropped by 57 percent from 2011 to 2017, decreasing by 200,000 metric tons during that span.[vi]This is fantastic news for a region that has more than 100 billion barrels of recoverable oil in the basin.[vii]Additionally, this innovation and efficiency has led to significant economic growth in areas that have struggled in the past:
Oil production from the Eagle Ford Shale has transformed a relatively poor region of South Texas into one of the nation’s most significant economic development zones. In fact, due largely to the oil and natural gas industry, the Texas Comptroller estimates that Texas has recovered 100% of the jobs lost during the Great Recession.[viii]
There are several factors that make Texas the highest oil-producing state in the United States. Texas is obviously an “oil-rich” state, with reserves and production dominating the rest of the country.[ix] But it isn’t enough to simply have access to the oil. Texas operates with guidelines and oversight that encourage the industry to flourish. Contrast Texas with California, for example, which is the 3rd most “oil-rich” state in the country (in terms of reserves) but does not crack the top five in oil production.[x]
Despite climate fearmongering from politicians urging a rapid transition to “green energy” (which relies a great deal on fossil fuels to operate), oil and gas remain a critical component of the U.S. energy portfolio and will be for the foreseeable future. The oil and gas industry is fundamental to the economy, security, and everyday lives of Americans. Texas is once again leading the way in energy production and innovation.
[i] https://www.reuters.com/business/energy/permian-basin-oil-output-surpass-pre-pandemic-record-2021-11-15/
[ii] Ibid.
[iii] https://www.timesrecordnews.com/story/opinion/2019/07/13/texas-producing-more-oil-natural-gas-than-rest-world/1708232001/
[iv] https://www.visualcapitalist.com/mapped-u-s-oil-production-by-state/
[v] https://www.timesrecordnews.com/story/opinion/2019/07/13/texas-producing-more-oil-natural-gas-than-rest-world/1708232001/
[vi] https://www.eia.gov/state/?sid=TX
[vii] https://www.hartenergy.com/exclusives/permian-basin-producers-talk-todays-challenges-eyes-future-197796?mkt_tok=NDMzLU9ESy04ODkAAAGBP_n7HoljUFgSpxtQVhRiZk0HR7gLVV59DnX7RQADpDnQWODAEZtDbjVdQpPPeCqIFq52SX16MIndnJnbr27k-zks_OZNpg92QYOjxtRwMtzn
[viii] https://www.visualcapitalist.com/mapped-u-s-oil-production-by-state/
[ix] https://www.usatoday.com/story/money/business/2013/08/03/the-most-oil-rich-states/2613497/
[x] https://www.visualcapitalist.com/mapped-u-s-oil-production-by-state/