Oil reserves were discovered in Beaumont, within the state of Texas in the early part of the 20th century, staring an era that would change the destiny for the Southern American state. While the earliest wells were found in the southern part, the exploration in the next couple of decades led to the discovery of more wells in the entire state.
Today, 223 of 254 counties within the state have oil production facilities. Petroleum, as we all know, was in great demand due to the rapid industrialization that was taking place across the United States at that time. Texas became the epicenter of development and research of the oil and natural gas industry and this changed the fortunes of the state in the times to come.
Texas before the “Oil Boom” as it is called was primarily a rural area and the economy was mostly agriculture and farming based. Oil and gas gave birth to an entirely new generation of entrepreneurs who made huge investments and set up shop in the state. People from the rest of the country moved base to Texas to work in the rigs and refineries. Soon, the cities became densely populated with Houston becoming the biggest beneficiary of the growth.
The area adjoining Houston became a global petroleum hub and home to some of the biggest refineries and petrochemical plants in the world. The availability of cheap oil also encouraged the use of automobiles and indirectly contributed to the growth of the auto sector. Real estate sector also witnessed unprecedented growth. The trade within the state grew leading to expansion of ports within the state. The government directly benefited from this sudden boom due by way of higher levels of tax collection within the state.
Currently, the Texas oil industry contributes close to 35% of the total national oil making US the largest oil producer in the world. The US contributes about 15% to the global oil production. The three biggest oil companies within the state of Texas today in terms of the production capacity are: – XTO-Energy Inc. – Pioneer Natural-Resources Co. – Exco-Operating Co. LP The combined monthly oil production capacity of these companies as per data available from a couple of years ago was 9.71 million barrels.
Railroad Commission of Texas is the regulatory body governing the petroleum industry in the state. As per data available from the official website of the commission daily production measured in barrels per day is up by 14% as of May 2018 compared to last year production figures. The Texas Petro Index which had gone down in the last few years (2016 being the lowest point) due to the fall in global oil prices, has seen a reversal since and continues its upward movement.
The Index as of June 2018 stood at 203.4 up 19.4% from the June 2017. More licenses are being rolled out and the related infrastructure like rigs continue to be commissioned leading to an uptrend in job creation. 47,000 jobs additions have happened in 2018, even though current levels of employment are still low compared to the peak levels of employment back in 2014.
Future and Conclusion As oil prices recover, the future looks bullish for the overall petroleum industry and specifically for Texas oil industry. While the US would continue to be the largest oil producer in the world, by 2019 Texas alone will surpass both Iran and Iraq in terms of production and become number 3 globally behind Russia and Saudi Arabia.