State of Texas will surpass Iran, Iraq in oil production in 2019

CNN/Money:

The shale oil boom has brought a gold rush mentality to the Lone Star State, which is home to not one but two massive oilfields.

Plunging drilling costs have sparked an explosion of production out of the Permian Basin of West Texas. In fact, Texas is pumping so much oil that it will surpass OPEC members Iran and Iraq next year, HSBC predicted in a recent report.

If it were a country, Texas would be the world's No. 3 oil producer, behind only Russia and Saudi Arabia, the investment bank said.

"It's remarkable. The Permian is nothing less than a blessing for the global economy," said Bob McNally, president of Rapidan Energy Group, a consulting firm.
...
Much of the excitement in Texas centers around the Permian Basin. Some oil execs believe the amount of oil in the Permian rivals Saudi Arabia's Ghawar Field, the world's largest conventional oilfield.

Rapid technological advances have dramatically brought down the cost of pumping oil everywhere, especially out of the Permian. Wells there can be profitable below $40 a barrel.

"The industry cracked the code on fracking," said McNally.

The rise of Texas, which is also home to the Eagle Ford oilfield in the state's south, shows how the shale oil revolution has reshaped the global energy landscape. The United States is pumping more oil than ever before, making it less reliant on the turbulent Middle East for imports.

"It's not going to make the world peaceful, but it will make it less volatile," said McNally, a former White House official.

Scott Sheffield, the chairman of major Permian player Pioneer Natural Resources (PXD), told CNNMoney last month that the United States will become the world's biggest oil producer by the fall.

The combined output of the Permian and Eagle Ford is expected to rise from just 2.5 million barrels per day in 2014 to 5.6 million barrels per day in 2019, according to HSBC. That means Texas will account for more than half of America's total oil production.
...

The irony is that OPEC attempt to bankrupt the shale drillers with predatory pricing led to the gains in efficiency that drove down the cost of production.  It now costs less to drill and produce shale wells in Texas than it does in most OPEC countries.  The biggest drawback to crude production in West Texas at this point is the need for more pipelines to get the oil to market.

However, much of this oil will be exported because the US refiners still need to import heavy crude in order to operate.  Exxon appears to be the only Major company that plans to build refineries to process the light crude from the shale wells.  To be truly energy independent, US refiners need to convert to using light crude, but the smaller ones are stuck wasting money on ethanol RINs rather than investing money in new facilities.  The ethanol lobby is now in the position of keeping much of the countries refineries in the import business.