Skip to comments.Texas oil output hits highest level in two decades
Posted on 01/29/2013 11:28:28 AM PST by thackney
Texas oil production rose by almost 100 million barrels in 2012 over the previous year, to the highest level in two decades. It was the fifth consecutive year with an increase.
Despite a drop in oil prices last spring, economist Karr Ingham predicts production will rise again in 2013.
Ingham offered a look at the states energy industry Monday as he presented the Texas Petro Index, the snapshot he developed to track trends for the Texas Alliance of Energy Producers almost 10 years ago.
The 3,300-member alliance receives monthly updates from Ingham, covering rig counts, drilling permits, well completions, industry employment and other factors.
Townes Pressler, chairman of the alliance, suggested the numbers portend the future for energy-producing regions across the country.
The plays are huge, he said. The Marcellus. The Bakken. Texas will never be the same, at least South Texas, after the Eagle Ford.
But they also represent the shifting fortunes that anyone who has spent time in the oil and gas business learns to deal with.
For 2012, Texas producers delivered an estimated 604 million barrels of crude oil, up from 509 million barrels in 2011. That compares with 613 million barrels produced in 1992.
But oil production had slid to 391 million barrels in 2007, as drillers shifted to natural gas to take advantage of rising gas prices.
Those rising prices didnt last. Natural gas prices ended 2012 at $2.73 per thousand cubic feet, down 31.5 percent from the previous year and down dramatically from just a few years earlier.
Natural gas prices ended trading Monday at $3.29.
Natural gas production dropped by 7 percent in 2012, and Ingham speculated prices would have to rise to $5 per thousand cubic feet to lure drillers back.
Kenneth Floyd, a partner at the East Texas-based natural-gas firm AC Exploration, agreed. He said its been hard for small companies like his to shift to natural gas liquids, a strategy pursued by many gas drillers stung by low gas prices.
Predicting the future is more complicated than reporting the past, but Ingham gave it a try.
Crude oil prices peaked in March 2012 at about $103 a barrel, and Ingham said he expects prices to remain $85 to $90 a barrel for the next year.
They were up slightly Monday, as benchmark oil rose 56 cents to $96.44 on the New York Mercantile Exchange.
I hope we see a continuation of what were seeing now, Ingham said. A stabilization of rig counts. Stable but high levels of employment.
His figures show employment in the oil and gas production, drilling and service sectors rose 10 percent between 2011 and 2012, to 248,642.
Employment in the oil and gas extraction sector was up 15 percent, to 102,258.
Still, Ingham said, there are a few cracks beginning to show.
While employment in the extraction sector is still rising, employment in the other sectors is starting to slip, he said.
Overall, Ingham said, the outlook for Texas oil industry remains strong.
Theres little doubt were seeing a crude oil renaissance, he said. Every consumer in the state and the country and the planet ought to be happy about that.
Texas Field Production of Crude Oil
Nearly half the drilling rigs operating in the US are operating in Texas.
819 out of 1,753
This is impossible because Peak Oil! was reached in
Think peak cheap oil.
We wouldn’t be producing these tight formations at $20/barrel.
We owe it all to the wildcatting efforts of Potentate Baraq....
oh wait he wants us to drive on windmill power, LOL
Haven’t you heard? $80 is the new $20.
Wow. That middle graph is a monetarist’s dream.
Can you say “Bubble?” 1999 - 2008. Housing.
Now, we’re back to the comparatively low-inflationary norm of about 1.7 OZ of gold / barrel. Interesting.
Got any other good graphs for my continuing edumacation?
So this what late JR Ewing was planning last night on season premire of Dallas
Where are the peak oil folks? I haven’t heard from them in a while. They must be hanging out with the Boeing battery and the Apple Corps (or should that be Apple Corpse).
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