By Ryan Sitton
Recent energy headlines have revealed exactly what we hoped for in 2017 — oil and gas prices are slowly rising, new investments are pouring into Texas’ world class plays, and jobs are returning to our state.
To date, most OPEC nations have followed through with their agreement to cut production, which has created new opportunities for Texas producers. The oil cartel thought it could break Texas energy, but what they ended up doing was putting their own countries’ financial health in jeopardy. Texas innovation has allowed our producers to develop more energy resources at ever decreasing costs, filling the void OPEC created.
Our ability to quickly bring production online, decreased drilling and development costs, and our regulatory framework have made Texas THE PLACE to explore for oil and natural gas. Companies like Marathon Oil, who recently announced plans to divest in Canada and invest $1.1 billion in the Permian Basin, are looking to Texas for the future of oil and gas. ExxonMobil announced this week a $20-billion investment in the U.S. Gulf Region, which is expected to create more than 45,000 jobs for Americans. Many of those investments will be in Texas because of our superior energy infrastructure and labor.
U.S. oil production is now pushing 9 million barrels per day and increasing at a rate faster than it did during the oil boom from 2011-2014. With new production coming online every day, the industry is responding with new infrastructure to support the growth. This week, plans were announced for a new refinery in Pecos County that would be capable of processing 50,000 barrels per day. Aside from the proposed Duval County refinery, the Pecos County facility would be the first refinery built in 40 years. Not only is this good news for West Texas, it benefits the state as Texas refineries account for 30 percent of total U.S. refining capacity.
In midstream news, three companies have pulled together to propose a 730-mile oil pipeline from West Texas to the Gulf of Mexico in Corpus Christi. The resulting pipeline would be the state’s longest to be built since at least 2008. This kind of energy infrastructure is critical as we prepare for a continued increase in production over the next 5-10 years.
Renewed growth in the industry is good for our schools, jobs, roads, state budget and overall economy. Texas, and the world class Permian Basin, is leading America toward a position of global energy dominance.