Discussion: (11 comments)
Comments are closed.
A public policy blog from AEI
View related content: Carpe Diem
The Energy Information Administration released new data today for US oil production by state through the end of last year, and its report showed that “Saudi Texas” produced an average of 2.22 million barrels per day (bpd) in December, the highest average daily output in the state in any month since June 1986, more than 26 years ago (see chart above). Texas oil production increased by 30% in December from a year earlier, and by 73% from two years ago.
Amazingly, oil production in the Lone Star State has doubled in only three years, from 1.1 million bpd in January 2010 to 2.22 million bpd in December 2012, 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. The exponential increase in Texas oil output over 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.
Further, Texas oil output in December at an average of 2.22 million bpd was 27% greater than the US oil imports that month from all of the Persian Gulf countries (Saudi Arabia, Iraq, Kuwait and Qatar) combined at 1.75 million bpd. In fact, Texas oil output surpassed Persian Gulf imports in each of the last four months starting in September, and that has never happened before in the history of the monthly EIA data for Persian Gulf imports back to January 1993.
Remarkably, oil output has increased so significantly in both Texas and North Dakota in recent years, that if those two oil-producing states were considered as a separate country, they would be the 9th largest oil-producing nation in the world with combined output of almost 3 million bpd in December, just slightly behind No. 8 Iraq (3.08m bpd) and No. 7 Iran (3.17m bpd), and ahead of No. 10 Brazil (2.91m bpd) and No. 11 Mexico (2.89m bpd). Thanks to the shale oil bonanza in the North Dakota Bakken and the Texas Eagle Ford Shale, those two states together produced between 42% and 43% of all US oil output in each month during the second half of 2012, an unprecedented record high share of US oil output for those two states. A little more than three years ago in the summer of 2009, Texas and North Dakota together produced less than 24% of America’s domestic oil output. But that all changed when the revolutionary extraction technologies of hydraulic fracturing and horizontal drilling starting accessing oceans of oil trapped inside shale rock miles below the ground in Texas and North Dakota that were previously inaccessible with traditional extraction technologies. Thanks to those breakthrough technologies, oil output in Texas and North Dakota is growing exponentially, which is helping to deliver a powerful economic stimulus to those states in the form of thousands of new high-paying shovel-ready jobs and billions of dollars in royalty payments to landowners.
As Daniel Yergin wrote in the WSJ last October, “Without these energy resources, the disappointing economic picture would look worse, and so would the jobs numbers. Instead, the energy revolution is helping revitalize the economy and make the U.S. more competitive in the global marketplace.”
Comments are closed.
1150 17th Street, N.W. Washington, D.C. 20036
© 2015 American Enterprise Institute for Public Policy Research