Texas oil production approaches 43 year old record

Fuel Fix:

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Despite massive cutbacks in the oil field, Texas likely broke the state’s 43-year-old record for crude oil production with an estimated 1.267 billion barrels in 2015, Ingham said Tuesday at the Petroleum Club in downtown Houston.

“If we don’t hit [that record], we’re going to get awfully close to it,” he said.

Ingham said he is a “little worried” that Texas producers have unlocked so much oil supply that prices could stay depressed for years, as has happened with natural gas prices.

“The industry has cracked open an energy supply of crude oil and natural gas literally for decades into the future,” he said.

The state’s crude oil production peaked in March, reaching 3.6 million barrels per day according to the U.S. Energy Information Administration. But production has remained stubbornly high — despite a massive drawdown that has seen hundreds of rigs sidelined in Texas oil fields — because many wells were already drilled and completed.

“We’re now on the course of sustained production decline in Texas,” Ingham said. “But it’s not like it just falls off a cliff.”

Texas dropped from more than 306,000 direct upstream oil and gas jobs down to little more than 246,000 jobs by the end of the year, with more job reductions announced in January.

The last time oil prices hovered near $30 a barrel was in 2003, when Texas had only about 130,000 oil and gas jobs total; Ingham didn’t project job losses to extend that far, but he said a lot more should be expected unless oil prices rebound.
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This is another reason why the OPEC strategy of increasing production has failed.  It will be interesting to see If the Texas Railroad Commission starts managing production again to stabilize the prices.