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Despite the sluggishness of the U.S. economy there's reason for optimism because of the energy sector, even if we haven't yet seen growing domestic fuel supplies greatly reduce retail prices... Some say that's foreseeable in perhaps a few years.
That's because the growth in the energy sector is expected to continue to grow like gangbusters – led by Texas, according to Karr Ingham, a petroleum economist for the Texas Alliance of Energy Producers and creator of the Texas Petro Index, speaking at the Petroleum Club on the latest release of the index.
“We would be the 14th largest oil producing country on the planet, if Texas were a country,” Ingham said. “You have the Permian producing 925,000 barrels a day and the Eagle Ford escalating to 540,000 barrels a day — that is just extraordinary.”
Emily Pickrell of the Houston Chronicle reports that the Texas Petro Index was established in 1995 and reflects growth in several elements that drive the energy industry, including crude oil and gas prices, the rig count, drilling permits, well completions, oil and gas production rates and employment in the industry.
The Permian Basin and the Eagle Ford have helped make Texas the producer of almost half of all crude oil and a quarter of natural gas produced in the United States, Ingham said.
“The Permian is still the big dog on the block, in Texas — and nationally,” Ingham, the Amarillo economist who prepares the Midland-Odessa Regional Economic Index for Midland Development Corp. and Security Bank, said. “It means Texas will maintain its position as the big dog on the block nationally.”
“Expansion has been driven by entirely different factors from the 2008 run-up,” Ingham set, noting that both oil and gas prices have fallen dramatically from 2008. “The scenario has flip flopped.”
Areas of Texas where the growth is the most acute, such as Odessa in the Permian Basin, are having a difficult time keeping pace with the growth in production, and demand for employment in areas such as education, has also peaked.
The energy sector also contributes about 25 percent of all taxes collected by the state of Texas.
“That is an extraordinary burden that is carried on the shoulders of the Texas oil and gas industry,” Ingham said.
The oil boom has also created a growth frenzy in North Dakota, home to the Bakken Shale. The North Dakota led the nation in economic growth with a robust 13.4 percent in 2012. The Texas economy grew 4.8 percent in the same time period.
Will California be next to unshackle its energy potential and benefit from its untapped oil &amp; gas abundance? Perhaps not, but, stranger things have happened.