Texas has defied her critics since the first days of the Republic. Few expected the Texian rebels to route the Mexican army and defeat General Santa Anna at the Battle of San Jacinto, and few believed that the fledgling country would survive and ultimately join the Union. However, Texas proved its doubters wrong.
Twenty years ago, Permian Basin oil and gas production slowed to a trickle, and few analysts believed that investment in the area would ever pay off. But investments in fracking technology, horizontal drilling advancement and innovations of the oilfield services and equipment sector have led the way for an energy renaissance. In 2018, oil and gas production allowed the United States, primarily through the Permian Basin, to surpass Russia and Saudi Arabia in becoming the world’s leading producer of oil and natural gas. This seismic shift reshaped the global economy, created thousands of jobs and allowed Americans to become less dependent on foreign energy sources.
The power of the energy industry in Texas helped pull the country out of a recession in 2008. Energy prices buffered economic fallout in the state, and the Texas economy declined slower than the national average and bounced back faster. Permian production has grown steadily since 2010, and the state is by far the most important energy-producing area in the U.S. Texas now produces so much crude oil that its daily production (more than 3 million barrels) represents more than 37% of the nation’s crude oil output. If Texas was once again its own country, it would rank as the world’s sixth-largest oil producer. Simultaneously, Texas is creating jobs — specifically 1.44 million new jobs in the state since 2007. That is more new jobs than people living in San Diego, a Texas miracle that is truly amazing.
By becoming a net exporter of oil, the U.S. has fortified its relationships with allies and reduced dependence on Moscow and the Middle East. As we quadrupled our LNG exports and dominated both crude and refined product exports, America secured its foothold as a diverse energy producer and international industry leader.
Pipelines from all over the country bring LNG and crude to the Texas coast for refinement and processing into other products. The state’s refineries processed more than 5.7 million barrels of crude oil per day, as of January 2018, and accounted for 31% of the nation’s refining capacity. This production then flows down to the Texas Gulf Coast ports, which account for 80% of the nation’s crude oil exports. Capacities here are growing with expansion projects and updates to infrastructure in order to accommodate the ever-growing volume.
In order to continue providing the nation with the energy needed to fuel economic growth, Texas is focused on energy transition and renewables. Texas will lead our country in an energy transition, as it dominates wind energy production and generates more wind power than all but five countries in the world. Innovations in wind technology have allowed production to increase and provides an increasingly-greater share of the state’s electricity. The diversification of Texas’ energy production portfolio incorporates the need for long-term sustainability while satisfying the growing need for energy.
It’s worth noting that all of this has been accomplished while maintaining clean air and water along the Texas Gulf Coast. In fact, the ozone attainment in the Houston area is four times better now than in 1997 to 1999, and updated regulations and restructuring within the Department of the Interior have provided improved safety offshore.
The world, and the rest of the country, should look to the Texas Miracle as a model for how responsible energy production can fuel economic growth and bring much-needed power to the world.
For more information about PESA, please visit pesa.org.