Reports make it official: Oil and gas are booming

In case you had any doubts, two reports released this week confirm that the oil and gas economy in Texas is still hot.

Drilling permits issued in January and February were up 10 percent over the same period in 2012, according to economist Karr Ingham, who created the Texas Petro Index.

The number of permits issued in February actually slipped by about 3 percent over 2012 numbers, Ingham noted.

But the Railroad Commission issued 3,722 permits during the first two months of the year, “the strongest start to a year in the entire history of the TPI,” he said.

Karr developed the index a decade ago to track trends for the Texas Alliance of Energy Producers. He reported in January that Texas oil production rose by almost 100 million barrels in 2012 over the previous year, to the highest level in two decades. It was the fifth consecutive year with an increase.

This week he reported a “stunning” increase in oil and gas industry employment in Texas.

After the annual revision in state employment data, which was concluded in March, the Texas Workforce Commission estimated that 267,000 people worked in the upstream oil and gas industry at the end of the year, Ingham said. That category includes drilling and service companies.

The Texas Independent Producers & Royalty Owners Association released a similarly upbeat report looking at trends in employment, wages and other economic factors.

Its State of Energy Report counted total oil and gas industry employment in Texas at 379,800 during the first half of 2012. Nationally, the industry employed 971,200 people in the first half of 2012, the report said.

While the Texas Petro Index relies on the Texas Workforce Commission for its employment data, the Texas Independent Producers & Royalty Owners Association report drew its employment data from the U.S. Bureau of Labor Statistics, spokeswoman Kelli Way said.

The average national industry wage was $107,200 in 2012; that compares with an average private sector wage of $48,900, according to the report.

“Texas continues to lead the country in oil and gas production, innovation and employment, due in part to our favorable business and regulatory climate,” Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, said in a statement.

Among other highlights that Ingham noted in the February installment of the Texas Petro Index:

  • Crude oil production totaled an estimated 50.6 million barrels, about 8.3 percent more than in February 2012. Crude oil wellhead prices averaged $91.90 a barrel, 7 percent less than February 2012.
  • Natural gas production was about 528.7 billion cubic feet, a year-over-year monthly decline of 12.5 percent. Natural gas prices averaged $3.27 per thousand cubic feet, up about 26.3 percent.
  • The Baker Hughes rig count averaged 833, down 8.9 percent.