If Texas were a country and Texans like to think of it that way, it would be the third largest energy producing country in the world behind Saudi Arabia and Russia, Texas Railroad Commissioner Ryan Sitton said, Petrochemical Update reported.
Commissioner Sitton was speaking at Petrochemical Update’s Supply Chain and Logistics conference in Houston.
U.S. crude oil production and subsequently petrochemical production has increased significantly during the past ten years, driven mainly by production from tight oil formations using horizontal drilling and hydraulic fracturing.
At this rate, many analysts are predicting that Texas will surpass Iraq and Iran and pave the way for the U.S. to become the world’s leader in oil production.
Most recently, U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to the U.S. Energy Information Administration’s (EIA) latest Petroleum Supply Monthly in November, up from 10.9 million b/d in July.
This is the first time that monthly U.S. production levels surpassed 11 million b/d.
U.S. crude oil production exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the U.S. the leading crude oil producer in the world.
Texas had the highest production of U.S. states at 4.6 million b/d.
The Permian Basin region accounts for about 63% of total Texas crude oil. From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d, the EIA said.
The growth in the Permian Region since the start of 2018 surpassed the EIA’s previous expectations, which assumed that pipeline capacity constraints in the Permian region would dampen production growth.
However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than the agency expected.
Economic Impact
The oil and gas industry are around 15% of the state’s economy, but several industries support the sector making that number higher.
“Consider the ancillary industries that support the industry. Consider a guy who owns a hotel in south Texas but 90% of his guests are staying there working on an oil project, so we can say that it is nearly 1/3 of the state’s economy,” Sitton said.
While the economy goes through cycles, and technology and other industries are changing quicker than ever, one thing that does not change is the world’s need for energy.
“As the population of the world grows, the hunger for basic products such as energy, water and commodities never go down. It only goes up,” Sitton said. “Everything from oil to natural gas to petrochemicals like polyvinyl chloride (PVC) to wood. All these things have gone up for the last 50 years with only two years where they were level and never dropped.”
Surging Production
Texas oil production has grown from 1 million b/d to more than 4.5 million b/d, according to the EIA.
Texas now refines 6 million b/d of crude oil. The Port of Corpus Christi exports 1 million b/d of oil, more than all the other ports in the country combined, Sitton said.
