Where would Americans be without Texas?

[dan_s]

Answer: At a much lower standard of living.
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Against the Odds, U.S. Crude Oil Production Marks Two Major Milestones – With Texas and Texans Leading the Way

Guest Piece From Karr Ingham, Executive VP/Petroleum Economist at the Texas Alliance of Energy Producers

Here’s the obvious part about (1) the return to record crude oil production in the United States, and (2) the fact that the U.S. is now producing more crude oil on a daily basis than any country ever has.  It speaks particularly well of our economic system and the dogged ingenuity of U.S. oil and gas producers that we can indeed grow crude oil production to this level.  And that we can do so even in the face of an Administration and one of two major national political parties who have become fanatically anti-U.S. oil and gas, and anti-petroleum energy as they bow at the altar of climate change. 

This means that, in actuality, they are actually anti-prosperity, anti-human flourishing, and anti-abundant, affordable, and reliable energy to the detriment and peril of their own economy, and their own citizens.  And disturbingly, it also means they are anti-development for the masses of population around the world that have yet to escape energy poverty, much less experience the splendor of energy abundance and all the blessings that come with it. 

Beyond that, while it may have taken a bit longer than I originally anticipated, it has happened - U.S. producers have responded to higher prices (lower in 2023 than 2022, but still favorable) with production increases, closed the gap created by COVID production losses, and pushed production to record levels and climbing.  And as was the case pre-COVID, production declines implemented by OPEC+ mean one thing - the U.S., led by Texas will fill that gap, and OPEC+ will cede market share to the United States whether they like it or not.  And they don't.   

Less obvious may be where crude oil production growth in the U.S. is coming from.  It's not just generically "the United States" that is growing production.  A quick look at production states and regions quickly shows only four of the nation's producing states have recovered lost COVID production and are now producing at record levels:  Texas, New Mexico, Utah and Ohio.  While we should thank our lucky stars for every barrel from anywhere, Utah and Ohio do not move the needle so much, throwing in about 260,000 bpd between the two of them.  Texas and New Mexico, pushing 7.5 million bpd between the two of them, are driving that production growth in the U.S. post-COVID.   

In terms of production regions, only the Permian can boast fully recovered and record production.  Not the Bakken, and not the Eagle Ford, which is still down compared not only to just pre-COVID, but still down compared to 2015-16 levels.   

And even in Texas, only one Railroad Commission district in the state is at record production levels, and that is District 8, the core of Permian Basin production.  (The total Texas Permian includes Districts 7C, 8, and 8A).   

So, clearly the Permian is virtually the singular driving force behind the attainment of new all-time crude oil production records in the United States, and the fact that the U.S. is now producing more crude oil than any single country in the history of the planet. 

To be fair, North Dakota/Bakken production is on the rise, and is contributing barrels to the record U.S. total in 2023, but remains behind its pre-COVID production.  And Federal Offshore in the Gulf of Mexico is now hovering near record levels, incredibly (the Biden Administration has been especially obstructionist and foot-dragging when it comes to managing these leases). 

But again, it is the Permian that is virtually entirely responsible, and not the entire Permian at that.  The U.S. is setting production records, and producing more crude oil than any other country ever has, because of the fantastic growth concentrated in Texas Railroad Commission District 8, and Lea and Eddy Counties in New Mexico. 

At over 5.98 million barrels per day in December 2023, the Permian Basin (in total, both Texas and New Mexico) is producing over 45% of total U.S. crude oil production, and is barreling (no pun intended) toward 6 million bpd and beyond. 

In other words, the U.S. is now producing more crude oil than any country ever has, because Texas oil and gas companies, and Texas independents in particular, are growing production in the Permian Basin for the benefit of the American people and the American economy.  And are doing so with mercilessly higher levels of efficiency and productivity.  These record production levels have been accomplished with nowhere near record rig counts or industry employment. 

It is also happening because the Biden Administration and House and Senate Democrats have not yet figured out how to stop it.  And they certainly have not figured out how to quell the demand for the crude oil and natural gas we produce. 

This discussion has been about crude oil.  Natural gas is a separately fantastic story as well, and other states and regions in the U.S. are faring better in that regard.  Even at that, though, Texas and the Permian are leading the charge with record and (rapidly) growing output. 

God Bless Texas, and Texas independent oil and gas producers.