Barry Smitherman, the Chairman for the Texas Railroad Commission, has said that the number of drilling permit applications being submitted in the lone star state have reached their highest level for 30 years, and that production is continuing to rise to near record levels, putting Texas on track to become one of the largest oil producers in the world before 2020.
"This year we are likely to issue more drilling permits for oil than we have since 1985."
Fuel Fix performed a review of the drilling permit applications submitted and found that during the first eight months of 2013 the number of applications is 18% higher than in 2012. Smitherman says that this increasing number of permits has already seen daily oil production in Texas surpass 1.8 million barrels, and will likely move onto 3 million barrels a day in 2017, and 4 million a day in 2020.
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"If we got to 3 million or 4 million barrels per day, we suddenly are in the club of the biggest producers in the world."
The top crude oil producer in the world at the moment is Russia, producing 10.73 million barrels a day (12.65% of world production). Producing 3 million barrels a day would make Texas the ninth largest producer, behind Russia, Saudi Arabia, US, Iran, China, Canada, Iraq, and the UAE. Producing 4 million barrels a day would make Texas the sixth largest producer.
Texas' resurging production levels are thanks mainly to the Eagle Ford Shale formation in South Texas, and the Permian Basin in West Texas.
The Permian Basin has experienced a new lease of life as a major producing formation thanks to hydraulic fracturing, which has allowed companies to restart production at old fields, boosting the daily output to around 900,000 barrels.
The Eagle Ford has experienced an explosion in growth, producing just 352 barrels a day in 2008 it now produces 657,000 barrels a day. Smitherman predicts that, due to the number of new drilling permits, the field could start producing over 900,000 barrels a day next year.
"What has happened in our state over the last five to six years is nothing short of a technological miracle."
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com More
Comments
Brent is the benchmark crude, and its price has been well above $100 a barrel for a couple of years now. West Texas Intermediate, the US benchmark crude, has been trading within $3 or $4 a barrel of the Brent price since new pipeline capacity has allowed pumping down the crude backed up at the hub in Cushing, Oklahoma. The Brent price reflects the global market and that's pretty much the price US refiners have to pay.