Texas on track to be among world’s largest oil producers

Barry Smitherman, right, chairman of the Texas Railroad Commission (AP file photo/Harry Cabluck)

Barry Smitherman, right, chairman of the Texas Railroad Commission (AP file photo/Harry Cabluck)

Drilling and production in Texas continues to rise, putting the state on track to be among the world’s largest producers of oil by the end of the decade, a Texas regulator told a Houston audience Monday.

Texas Railroad Commission Chairman Barry Smitherman said that drilling permit applications are approaching their highest level in nearly 30 years at the same time as oil production continues to rise.

“This year we are likely to issue more drilling permits for oil than we have since 1985,” Smitherman said at an event hosted by the Locke Lord law firm downtown.

The three-member Railroad Commission regulates oil and gas in the state.

A FuelFix review of oil drilling permit applications submitted through the first eight months of 2013 showed that applications jumped 18 percent from the same period a year ago.

Smitherman said daily oil production in Texas has surpassed 1.8 million barrels and is on track to reach 3 million barrels in 2017 and potentially 4 million barrels by 2020.

“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,” Smitherman said.

Saudi Arabia led the world last year, producing 11.7 million barrels of oil per day, and seven nations produced more than 3 million barrels a day in 2012, according to the U.S. Energy Information Administration.

While growing production in South Texas’ Eagle Ford Shale has been a major force driving the state’s oil boom, strong production from the Permian Basin of West Texas has again provided large amounts of crude, he said.

The Permian Basin has long been a strong oil producing region for the state, and now companies are using hydraulic fracturing to jump start production even in old fields, Smitherman said.

Output in the Permian Basin  is now about 900,000 barrels per day, higher than in the Eagle Ford, he said.

“It kind of reminds me of the Energizer bunny,” Smitherman said of the Permian Basin. “It keeps going and going and going.”

The Eagle Ford, which produced just 352 barrels per day in 2008, now produces 657,000 barrels per day, he said. That output is likely to jump above 900,000 barrels per day next year, based on permit applications and drilling results, Smitherman said.

“What has happened in our state over the last five to six years is nothing short of a technological miracle,” Smitherman said.

Smitherman, who is seeking the Republican nomination for Texas attorney general, said he expects U.S. Energy Secretary Ernest Moniz to approve more options to export natural gas from Texas. He said growing natural gas production in the state could benefit from additional outlets, and the world market could benefit as well.

Moniz is likely to approve more terminals that could export liquefied natural gas to other countries, Smitherman said.

“I think he’s making this a high priority,” Smitherman said of Moniz. “I know him. I’ve talked to him and I think he has embraced LNG export and I think you’re likely to see permitting move along faster than it was when Steven Chu was secretary of energy.”

Moniz succeeded Chu  earlier this year.

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