Ryan Sitton addresses conference studying supply chain resiliency

Before he was elected to the Texas Railroad Commission, Ryan Sitton attended a conference on reliability.

At the time, reliability meant preventing corrosion and preserving the integrity of pipelines, Sitton said Wednesday at the Permian Basin Oil & Gas Supply Chain Resiliency Workshop.

The workshop at the Region 18 Education Service Center was designed to offer a detailed look at how prepared the industry is, and what resources are available to help with everything from domestic or international terrorism, computer hacking, natural disasters and human error.

“Security is huge,” Sitton told his audience of law enforcement officials, company representatives and other security officials.

Sitton discussed the game-changing growth experienced by American oil producers as technology unlocked oil reserves considered undevelopable just 10 years ago:

– In 2008, the U.S. peaked as an oil importer, importing 60 percent of its oil, and the world’s top oil producers were Saudi Arabia and Russia at 9 million barrels a day each; the world consumed about 85 million barrels of oil a day.

– Today, the U.S. imports 40 percent of its crude, Saudi Arabia and Russia are now producing about 10 million barrels of oil per day and the world consumes 93 million barrels a day.

– Texas was producing about 1 million barrels a day in 2008; today it produces about 3.5 million barrels a day. Of that, a little less than 2 million barrels comes from the Permian Basin.

“The United States has gone from about 5 million barrels a day in 2008 to almost 10 million barrels a day; domestic oil production growth dwarfs every nation in the world and Texas’ production growth is greater than all of them except the U.S.,” he said.

“However — and we benefit a lot from that increase in production — we have to move it to market,” he said.

Of the Permian Basin’s 2 million barrels of daily production, almost all of it — about 1.6 million barrels — is moved by pipeline; the rest is moved by rail and the occasional truck, Sitton said during the conference’s keynote address.

And that offers new challenges for regulators, producers and law enforcement to ensure that oil is safely and securely moved to market to avoid impacting the state and national economies.

“Most people don’t realize how sensitive markets are,” he said.

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