Solids Control Equipments Manufacturer

Home > News > Crude Oil Production Triggers Economic Increase In Texas

Crude Oil Production Triggers Economic Increase In Texas

Crude oil production in Texas has increased 16 percent during the first six months of 2013 over the same period in 2012, creating an economic tidal wave throughout Texas.

“Midway through 2013, the Texas oil and gas exploration and production economy is enjoying stability at a high level of activity, modest increases in aggregate activity levels, and impressive employment growth,” said Karr Ingham, petroleum economist and author of the Texas Petro Index (TPI). “The industry continues to provide fuel to statewide economic growth, and at this point all signs are pointing to a continuation of those trends through the balance of 2013.”

Crude oil production totaled an estimated 64.6 million barrels, about 8.97 million barrels  more than in June 2012. Crude oil wellhead prices averaged $92.08/bbl, about 16.4 percent more than in June 2012. Production gains and higher wellhead prices combined to boost the value of Texas-produced crude oil by about 35.2 percent, to nearly $5.95 billion.

Additionally, crude oil production in first half 2013 totaled an estimated 372.2 million bbls, about 15 percent more than in first half 2012. The value of Texas-produced crude oil increased 10.4 percent to nearly $33.7 billion.

“Compared to the first six months of 2012, estimated crude oil production in Texas is up by about 15 percent midway through 2013, which in turn was up by about 35 percent compared to the same period in 2011,” he said.

Even though the Baker Hughes rig count is down 9.8 per cent in 2013 from last year with 841 active rigs, employment is up 7 percent. The number of Texans estimated to be on oil and gas industry payrolls reached a record 274,300, according to statistical methods based upon Texas Workforce Commission estimates revised in March. Industry employment in Texas dropped to a low of 179,200 in October 2009 after reaching a high of 223,200 in November 2008 during the previous growth cycle.

“The oil and gas industry played a huge role in Texas' standing in 2012 as the second-fastest growing economy in the country, achieving an annual growth rate of 4.8 percent based upon gross state product,” Ingham said. “Only North Dakota achieved a higher rate of growth--13.4 percent--which was virtually driven entirely by oil and gas activity in the state.

Despite North Dakota’s “spectacular” growth rate in 2012, Ingham noted that the Texas economy is much more diverse and is about 30 times the size of North Dakota’s economy.

Ingham noted that the Texas Petro Index in June 2013 increased to 284.2, up 3.4 percent from the same month in 2012. The TPI reached an all-time high of 287.6 in September and October 2008 and then declined to 188.5 in December 2009 before embarking upon the current growth cycle. The June TPI represents the peak in the current cycle.