AEI:
The Energy Information Administration (EIA) released new state crude oil production data yesterday for the month of October, and one of the highlights of that monthly report is that oil output in America’s No. 1 oil-producing state – Texas – continues its phenomenal, jaw-dropping rise. Here are some details of oil output in “Saudi Texas” for the month of October and the economic impact that production is having on the state’s economy:
- For the fourth straight month starting in May, oil drillers in Texas pumped out more than 3 million barrels of crude oil every day (bpd) during the month of October. The 3.36 million bpd in October was the highest daily oil output in the Lone Star State in any month since at least January 1981, when the EIA started reporting each state’s monthly oil production (see top chart above). Texas reached the two million barrel per day oil production milestone in August 2012, and has since added more than a million more barrels of daily oil production in less than two years to reach the three million barrel milestone in May of this year. Compared to oil production a year ago, Texas posted a 26% increase in October, and the year-over-year production increase of 695,000 barrels per day from October of last year is the largest annual output gain in state history.
- Remarkably, oil production in the Lone Star State has more than doubled in the last three years, from 1.59 million bpd in October 2011 to 3.36 million bpd in October of this year (see chart above), and that production surge has to be one of the most significant increases in oil output ever recorded in the US over such a short period of time. A 1.77 million bpd increase in oil output in only 36 months in one US state is remarkable, and would have never been possible without the revolutionary drilling techniques that just recently started accessing vast oceans of Texas shale oil in Texas oil field in the Eagle Ford Shale and Permian Basin. As I have reported before on CD, the Eagle Ford and Permian Basin oil fields in Texas are now each producing crude oil at a rate of more than 1 million bpd, joining an elite international group of only ten super-giant oil fields in the world that have ever surpassed the one million barrel per day production milestone at their peak level of output.
- The exponential increase in Texas oil output over roughly the last three years has completely reversed the previous, gradual 28-year decline in the state’s conventional oil production that took place from 1981 to 2009 (see arrows in top chart) – thanks almost exclusively to the dramatic increases in the state’s output of newly accessible, unconventional shale oil.