(The Center Square) – The powerhouse of the U.S. energy sector—the Texas oil and natural gas industry—reached a new record production high in June and July, surpassing all-time highs set 30 and 40 years ago, according to an energy economics analysis published by Texas Oil & Gas Association.
The analysis, conducted by TXOG’s Chief Economist Dean Foreman, Ph.D., shows that Texas’ production of oil, natural gas, and natural gas liquids broke previous records and that resource reserves are expected to support decades of prospective production. It also highlights a range of records broken in May, also surpassing previous 30- and 40-year-old highs.
“Texas shouldered three quarters of U.S. oil production growth year-to-date through July, re-setting its production records in the process,” Foreman said. “TXOGA’s new analyses offer insight into the value chain and operational flows, showing Texas is the key enabler of regional U.S. production, transportation, refining and exports–and a source of dynamism amid global markets that have been searching for clarity this year.”
“Texas has broken its production records and increasingly driven U.S. oil and natural gas production,” the report states. Year-to-date through July 2023, Texas accounts for 43.3% of all oil production and 27.4% of all natural gas marketed production in the country.
The Lone Star state’s oil production reached a record high 5.5 million barrels per day (mb/d) in June and July, while the report added that natural gas marketed production reached 31.4 billion cubic feet per day (bcf/d) in June before decreasing to 31.2 bcf/d in July.
These milestones are significant, TXOGA argues, because, “Texas drives U.S. oil and natural gas production, transportation and exports, thereby helping to sustain downward pressure on prices, foster investment and innovation, and augment reserves to support future production.”
Because Texas’ oil and natural gas reserves remain abundant, the industry is “supporting value chains with decades of prospective production,” it says, also contributing to national reserves. The analysis found the reserves “remain abundant and continue to grow.” Since 2016, Texas has accounted for over 40% of the nation’s oil reserves and nearly 25% of natural gas proved reserves, according to U.S. Energy Information Administration data.
According to a U.S. Geological Survey, decades of potential growth are attributed to these proved reserves—led by Texas—in the Permian Basin and Gulf Coast.
“Although the pathway from exploration through development and production inherently depends on economic considerations, it is clear that U.S. oil and natural gas have remained abundant, and with Texas’ leadership, these resources could remain the bedrock of American energy security for decades to come,” Foreman said.
TXOGA President Todd Staples points out that, according to EIA projections, by 2050, the world’s energy needs will nearly double.
“Clearly, Texas has the natural resources, manpower and infrastructure to meet not just our energy needs, but the energy needs of our nation and that of a growing world,” he said. “Policies and politics in Texas and across our nation will determine if we can be the trusted ally the world turns to, or if nations will have to look elsewhere for leadership on energy security. To that end, we need bold policy at the state and federal levels to keep Texas the global energy leader.”
Production records in June and July followed multiple records broken in May 2023.
In May, Texas produced the highest crude oil volume of 5,437,233 barrels per day for any recorded month since 1981.
Also in May, Texas natural gas liquids field production totaled 3,293,581 barrels per day—the highest on record for any month since 1993.
In May, Texas also:
imported the lowest amount of crude oil of 1,042,323 barrels per day since 2015; exported the highest crude oil and condensate volume of 3,453,144 barrels per day on record;exported refined products totaling 2,428,782 barrels per day for the first time on record since 1989;reported the second-highest Texas refinery crude oil net inputs of 5,532,000 barrels per day on record for any month since 1993; Had the highest Texas refinery NGL direct use of 3,044,543 barrels per day on record for any month since 1993.
Before breaking these records, if Texas were its own country, would already be the world’s third-largest producer of natural gas and the fourth-largest producer of oil. In the first half of 2022, the U.S. became the world’s largest liquid natural gas exporter, led by Texas, according to EIA data.
With increased production and the report’s forecast, Texas is on track to break previous records it broke in 2022. Last year, the Texas oil and natural gas industry broke records in every category, leading the U.S. in oil and natural gas production and lowering emissions, ranking first in industry job growth, wages, payroll and Gross Regional Product nationwide.
