Texas Gulf Coast oil terminals crossed a milestone in April, exporting more crude oil than they received from foreign sources for the first time ever, the U.S. Energy Information Administration (EIA) reports.
Texas exported 15,000 more barrels of oil per day (bpd) in April 2018 than the state imported. This figure was dwarfed in May, as exports exceeded imports by 470,000 bpd, with shipments going mainly to Canada, China, Italy, and the United Kingdom.
Expanded production resulting from the fracking revolution and Congress opening up foreign markets to U.S. crude oil exports in 2015 has had significant results for Texas and United States, the report shows. The EIA reports total U.S. crude oil exports have reached two million bpd, 70 percent of which, approximately 1.4 million bpd, leave through the ports of Houston and Galveston.
Growing Production, Jobs
During the 12-month period ending in June 2018, oil production in Texas increased by 27 percent, to 4.3 million bpd, the latest report from the Texas Alliance of Energy Producers states. This represented 40 percent of total U.S. oil production in June. Texas and the Houston area added jobs at twice the national rate during that period, according to U.S. Department of Labor statistics.
Tax revenues from increased oil production and exports are benefitting all Texans, says Texas Railroad Commissioner Ryan Sitton.
“Every single Texan is benefiting from oil and gas production in Texas,” Sitton told Environment & Climate News. “The state uses the billions of dollars in additional revenue from increased oil and gas production to fund road and bridge construction, higher education, and other important functions.
“Local governments also collect billions of dollars from the industry that are used to fund things like schools and hospitals,” said Sitton.
‘No Longer Subservient’
The growth of oil and gas production in Texas enables the state to influence world markets to the advantage of the nation as a whole, says former Texas Commission on Environmental Quality Chairman Kathleen Hartnett White, currently director of the Armstrong Center for Energy & the Environment at the Texas Public Policy Foundation and a policy advisor to The Heartland Institute, which publishes Environment & Climate News.
“Thanks to the shale revolution and hydro-fracturing, Texas is now in a position to heavily influence world energy markets such that the U.S. is no longer subservient to OPEC,” White said. “Indeed, we can dominate. Few Americans are even aware of the scale of operations that has been unleashed by the shale revolution.
“The most recent statistics show Texas shale industries account for more than 325,000 direct jobs with an average annual wage of $130,000, with investment in new Texas oil and gas projects totaling $71 billion as of August 2017, including $6 billion for new pipelines,” said White. “And a new five-year contract to deliver U.S. liquefied natural gas to Poland is trumping Putin.”
Risks to Continued Growth
Infrastructure limitations could hamper continued growth in oil and gas exports in Texas, says Sitton.
“The potential growth of the crude export market is almost entirely dependent on infrastructure,” said Sitton. “We need more pipelines, port enhancements—so large ships can load at ports—and export terminals.
“Several Texas ports like Corpus Christi and Houston are well-positioned to handle increased export volumes if we can secure funding to have the Army Corps of Engineers deepen and widen the ship channels so very large crude carriers can dock in those ports,” Sitton said.
Gary Stone, vice president of engineering at Five States Energy and a policy advisor to The Heartland Institute, says politics could hamper further growth in oil and gas production nationwide and in Texas, though he doubts it will.
“Drilling can be impacted by regulatory and political factors,” said Stone. “It is highly unlikely the state of Texas would ever move to limit drilling and fracking, but such action by future Democrat administrations on a national level could impact drilling and hence production volumes. I consider this a long shot.”
Duggan Flanakin ([email protected]) writes from Austin, Texas.
