Officials: Texas leads in oil, gas production, jobs due to regulatory environment, innovation

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(The Center Square) – Texas leads the U.S. in oil and natural gas production and job creation primarily because of an innovative and talented workforce and supportive regulatory environment, state and industry leaders argue. As the Biden administration continues to halt and delay permits, Texas has prioritized pipeline and port expansion to facilitate energy and job growth.

Last month, the upstream oil and natural gas industry saw significant hiring increases, adding 3,100 jobs and bringing the total direct upstream employment to 211,700. In December 2023, there were 15,300 more people employed in the sector than in December 2022, including an increase of 2,000 jobs in oil and natural gas extraction and 13,300 jobs in the services sector, according to state employment data.

“2023 was an incredibly solid year for upstream oil and gas job growth, despite global economic uncertainties that have held back strong price signals, and the year finished with a continued upward push on job expansion,” Todd Staples, president of the Texas Oil & Gas Association, said. “These oil and gas jobs, along with the associated activity in local communities that generates tremendous growth opportunities, benefit every part of Texas and continue to be the cornerstone of the Texas economy.”

Since the COVID-low point in September 2020, months of increase in upstream industry in Texas outnumbered months of decrease by 33 to 6, the association notes. Over the same time period, the industry added 54,700 upstream jobs, which pay among the highest wages in Texas.

EIA forecasts U.S. crude oil production will reach 13.2 million barrels per day (bdp) in 2024 and more than 13.4 million bpd in 2025, both new records, “thanks to the leadership of Texas producers,” the Texas Independent Producers and Royalty Owners Association (TIPRO) says. National production output is driven by Texas, and largely from west Texas in the Permian Basin.

The Permian Basin, the top shale-producing region in the country, is forecasted to break a new record of 5.974 million barrels per day (bpd), according to new U.S. Energy Information Administration production estimates. Natural gas production in the Permian is also projected to increase in February to a total 24.393 billion cubic feet per day (bcf/d).

By comparison, oil and natural gas output from the six leading basins nationwide is expected to slow or remain flat, according to the EIA.

Because of Texas producers, TIPRO argues, there will be enough supply to meet increasing domestic and global demand for petroleum and natural gas consumption. This is in part because of technological innovations implemented by the industry as well as regulatory efforts prioritized by the state.

As the Biden administration held up deep water port applications, offshore drilling and pipeline permits and advanced regulatory efforts to restrict oil and gas production, the Texas Railroad Commission, which regulates the industry, has taken the opposite approach.

In 2022 and 2023, the RRC issued 178 new intrastate pipeline permits to pipeline operators in line with its commitment to safety, strengthening additional energy infrastructure. The state legislature last year also allocated a record more than $240 million in additional funding for Texas ports, recognizing the role they play in delivering energy products at home and abroad.

Because of Texas producers, refiners, infrastructure and ports, the U.S. became the world’s largest liquified natural gas exporter in the first half of 2022, the EIA previously reported, led by Texas. The U.S. was also the top exporter of liquified natural gas in the first half of 2023, again led by Texas.

“Liquified natural gas is a vital fuel source for the U.S. and its allies,” TIPRO president Ed Longanecker said. “The continued buildout and expansion of terminals in the U.S. reflects how important this energy source is for our economy and national security. Citing climate goals, environmentalists are eager to halt any new LNG project, while failing to acknowledge the emission reductions that natural gas has delivered as new production records are met. In response, the Biden Administration is considering expanding climate change assessments for LNG exports, which would negatively impact the Texas economy and energy security for U.S. allies abroad.

“Texas continues to lead in the production of oil and natural gas by a wide margin to meet growing global demand for our product,” he continued. “Additional energy infrastructure is needed in Texas and across the U.S., as are policies and regulations that support domestic production and the build out of this critical transportation system. As producers work to provide reliable energy for our country and trade partners, new pipeline projects are coming online to ensure production from basins like the Permian Basin and Eagle Ford can make it to export terminals, municipalities, and storage.”

Expanding energy infrastructure means “providing the safest, most reliable means to transport oil and natural gas, while also lowering emissions by helping take trucks off the road,” Longanecker said. According to a recent Texan’s for Natural Gas report, producers in the Permian Basin reached a record low of methane intensity in 2022 while simultaneously reaching record production levels. The industry also reduced methane emissions intensity by nearly 85% between 2011 and 2022, according to the analysis.

Pointing to EPA data also showing national methane emissions declines, Mandi Risko with Energy In Depth told The Center Square, “It is possible to have energy security and reduce emissions – a fact the U.S. oil and natural gas industry continues to demonstrate.”

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