The year of 2014 will go down in history as the year crude oil and natural gas production in Texas and throughout the U.S. reached such epic proportions it had a positive impact on jobs, the economy and national security. Some believe the rise in domestic energy production will go so far it will create a “new world order.”
Crude production surpassed milestone after milestone in 2014, reaching almost 9 million bpd in the U.S., according to the Energy Information Administration (EIA). The EIA’s monthly data showed production at 8.97 million bpd in November, the highest since 1986. In Texas, crude oil production surpassed 3 million bpd, and the Texas Petro Index (TPI) set records each month of 2014.
However, the record activity eventually created an oversupply of crude oil. U.S. inventories climbed by 2.06 million barrels to 379.7 million barrels in November, creating a softening of price of some 25 per-cent to $75 per barrel.
Imported oil falls
Total U.S. net imports of energy as a share of energy consumption fell to their lowest level in 29 years for the first six months of 2014. Total energy consumption in the first six months of 2014 was 3 percent above consumption during the first six months of 2013, but consumption growth was outpaced by increases in total energy production. These changes led to a 17-percent reduction in net imports compared with the first six months of 2013.
The increase in total energy production was almost entirely concentrated in petroleum and natural gas. Petroleum accounted for 52 percent of the 2014 year-to-date increase, natural gas for 27 percent, renewable energy for 9 percent and nuclear electric power for 2 percent. Total coal production fell 1 percent.
The economy and jobs
The American Enterprise Institute (AEI) — a private, nonpartisan think tank based in Washington D.C. — released a study in 2014 that said the economic activity primarily in Texas created by the oil and gas industry caused a softening of the Great Recession that began in December 2007. AEI called the economic growth in Texas “a most amazing economic phenomenon.”
While the civilian workforce in the U.S., excluding Texas, decreased from 135.26 million in December 2007 to 134.27 million in September, Texas increased civilian employment from 11 million to 12.32 million during the same period, according to AEI.
“It’s also important to note while job growth in Texas slowed considerably in 2008 and 2009 due to the recession, the level of civilian employment in Texas never fell below its pre-recessionary, December 2007 level,” AEI said. “Also, while Texas was able to actually increase jobs slightly even during the depths of the recession in 2008 and 2009, the U.S. labor market minus Texas experienced a stunning loss of 8.374 million jobs in the two-year period between December 2007 and December 2009. Over the past year, Texas has added almost 1,600 new jobs every business day — a hiring rate of almost 200 jobs every hour.”
AEI points out much of the economic success of Texas in recent years that has fueled job creation in the state is a direct result of the shale oil and gas boom taking place in areas like the Permian Basin in West Texas (1.8 million bpd) and the Eagle Ford in south central Texas (1.6 million bpd).
Texas is producing more than 36 percent of America’s total crude oil and, as a separate country, would be the world’s eighth largest oil producer. AEI also pointed out Texas has done a great job of attracting businesses like Toyota because of the state’s “employer-friendly combination of low taxes, fair courts, smart regulations and world-class workforce.”
“The bottom line is the country, the president and all of us individually owe a huge debt of gratitude to Texas and to the oil and gas industry for helping support the U.S. economy during and after the Great Recession,” AEI continued. “Without the energy-driven economic stimulus from the fracking revolution, and without the gusher of jobs in Texas, there’s no question the Great Recession would have been much worse, lasted much longer and the jobs picture today would be much bleaker.”
Alex Mills is president of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
For more information, visit www.texasalliance.org or call (800) 299-2998.
