Texas

Texas

The Lone Star state generated 1.2bn barrels of crude oil and condensate in 2015, and 8.5 Tcf of natural gas thanks to multiple shale plays and producing regions, according to the Texas Railroad Commission.

That production came out of 323,659 active wells in Texas (there are another 111,704 inactive wells).

Oil producing wells accounted for 71% of those total wells. Of those, just 8,380 wells (~4.5%) produce more than 100 barrels of oil per day (BOPD). Nearly 70% of active oil wells produce less than 10 barrels of oil per day. On the natural gas side, only 86 wells (.09%) produce more than 5 million cubic feet per day (MMcfd), while 75% of active natural gas wells produce less than 0.25 MMcfd

Here’s the most notable plays:

The state has extensive infrastructure to get those hydrocarbons to market with 431,997 miles of all types of pipeline, according to TXRRC data.

EIA Analysis – Texas – 2016

Last Updated: January 21, 2016

Overview

Texas is second only to Alaska in total state land area1 and stretches some 800 miles at its widest points both east to west and north to south.2 Texas leads the nation in energy production, primarily from crude oil and natural gas,3 and is rapidly developing its wind energy resources as well.4 The state’s climate varies significantly from east to west. Warm, moist air from the Gulf of Mexico sweeps westward across Texas, losing moisture as it goes. The result is a climate ranging from humid and subtropical at the coast, through semi-arid on the high plains, to arid in the mountainous west.5

Texas has the second-largest population6 and the second-largest economy of any state after California.7,8,9 Texas leads the nation in energy consumption, accounting for more than one-eighth of the U.S. total.10 The state’s industrial sector accounts for the largest share of energy use.11 Texas has many energy-intensive industries, including petroleum refining and chemical manufacturing.12,13 The transportation sector accounts for the second-largest share of energy consumption,14 in part because of the distances across the state and the large number of registered motor vehicles.15 Because of its size and varied climate, the state’s energy use for heating and cooling is also high.16,17

Petroleum

Texas leads the nation in crude oil reserves and production. The state has almost one-third of all U.S. crude oil reserves.18 Although the reserves are found in several geologic basins around the state, the largest fields are in the Permian Basin of West Texas, where more than 20 of the nation’s top 100 oil fields are located.19 Texas produces more crude oil than any other state and exceeds even the federal offshore producing areas.20

West Texas Intermediate crude oil serves as a benchmark for crude oil pricing in North America.

West Texas Intermediate (WTI) oil serves as a benchmark for oil pricing in North America, in both the crude oil physical market and the crude oil futures market.21 WTI is a low-gravity, low-sulfur crude oil that yields a large fraction of motor gasoline when refined.22

The first major oil boom in Texas began in 1901 with the discovery of the Spindletop oil field.23 Later discoveries led to increased crude oil production in Texas until 1972, when state production peaked at more than 3.4 million barrels per day.24 In subsequent years, output fell to less than one-third of the 1972 peak. However, production began to rise in 2008 because of advances in production technology. In 2014, production exceeded 3.1 million barrels per day.25

With 27 petroleum refineries that can process more than 5.1 million barrels of crude oil per day, Texas leads the nation in crude oil-refining capacity.26 More than one-fourth of nation’s total refining capacity is located in Texas.27 The majority of the state’s refineries are clustered near ports along the Gulf Coast, including the nation’s largest refinery in Port Arthur.28

The largest refining center in the United States is located along the Texas Gulf Coast.

The Gulf Coast refineries can obtain crude oil from Texas producers, offshore oil fields in the Gulf of Mexico, and foreign imports. Together, they comprise the largest refining center in the United States.29 Many of the Texas refineries are complex facilities that use additional refining processes beyond simple distillation to yield a larger quantity of lighter, higher-value products, such as motor gasoline.30 Because of that capability, Texas refineries often process a wide variety of crude oil types from around the world, including lower-value varieties.31,32 Refined-product pipelines extend from the Gulf Coast refineries across the country, allowing petroleum products from Texas to reach virtually every major market east of the Rocky Mountains.33 Two of the U.S. Strategic Petroleum Reserve’s storage facilities are in Texas, at Bryan Mound and Big Hill.34 Texas leads the nation in total petroleum consumption,35 and, in 2014, it was fifth in per capita petroleum consumption.36 The state is first in the nation in the consumption of distillate fuel oil and liquefied petroleum gases (LPG). Texas LPG use, at more than three-fifths of the U.S. total, is greater than the LPG consumption of all other states combined.37 Almost all of the LPG is consumed by the industrial sector where it is used as a chemical feedstock in the state’s petrochemical plants. 38,39

While much of Texas is able to use conventional motor gasoline, the eastern half of the state and El Paso County, at the state’s extreme western tip, require several different motor gasoline blends to meet their diverse air quality requirements. Those blends include reformulated motor gasoline blended with ethanol, which is required in the metropolitan areas of Greater Houston and Dallas-Fort Worth.40

Natural gas

More than 25% of the nation’s proved natural gas reserves are in Texas.

Texas leads the nation in natural gas production.41 Almost one-third of the 100 largest natural gas-producing fields in the United States are located, in whole or in part, in Texas.42 Like crude oil production, the state’s marketed natural gas production reached its peak in 1972. From that peak of about 8.6 trillion cubic feet, yearly production declined to about 6 trillion cubic feet before stabilizing in the mid-1980s. Since 2004, natural gas marketed production levels have rebounded and, by 2014, reached 7.95 trillion cubic feet.43 Much of the increase in production is the result of drilling in the Barnett, Eagle Ford, and Haynesville-Bossier shale formations.44,45 Advances in horizontal drilling and hydraulic fracturing technologies, coupled with increased gas prices in the late 1990s, led to significant drilling activity. The Barnett and Haynesville/Bossier formations produce mainly dry gas,46 while the Eagle Ford Shale produces substantial amounts of petroleum and natural gas liquids, along with natural gas, from more than 20 fields in 23 counties stretching across South Texas.47 More than one-fourth of the nation’s proved natural gas reserves are located in Texas.48

The development of pipeline systems in the mid-20th century to move natural gas to distant markets resulted in today’s expansive network of interstate natural gas pipelines. Natural gas is shipped from Texas to markets across the nation and in Mexico,49 and pipelines carry natural gas through Texas to and from other states. The state’s largest net receipts are from New Mexico and the federal offshore producing areas.50 There are more natural gas market hubs in Texas than in any other state.51 Because the natural gas infrastructure in Texas is well connected to consuming markets throughout the country, two liquefied natural gas (LNG) import terminals were built along the state’s Gulf Coast.52 The state’s first LNG terminal at Freeport became operational in April 2008.53 Another LNG terminal, Golden Pass, started up in 2010.54 Owners of both terminals are adding capability to export LNG, and other export terminals are also in development in Texas.55,56

Natural gas storage capacity in Texas is among the largest in the nation.57 A majority of the state’s 37 active storage facilities58 are in depleted oil and gas fields converted for storage use,59 and the rest were developed in salt caverns.60 Those facilities allow Texas to store natural gas when demand is low and to ramp up delivery quickly when demand increases.61

Texas leads the nation in natural gas consumption, accounting for about one-seventh of the nation’s total usage.62 The industrial and electric power sectors dominate Texas natural gas demand and together account for more than four-fifths of in-state consumption.63 The Texas industrial sector is responsible for about one-fifth of the nation’s total industrial sector consumption of natural gas.64 The amount of natural gas used for electricity generation in Texas is greater than in any other state and is more than one-sixth of the U.S. total used for electricity generation.65

 

Endnotes

1 U.S. Census Bureau, Geography, State Area Measurements and Internal Point Coordinates (2010).
2 Texas State Historical Association, Texas Almanac, Environment, accessed December 6, 2015.
3 U.S. Energy Information Administration, State Energy Data System, Table P2, Energy Production Estimates in
Trillion Btu, 2013.
4 American Wind Energy Association, Texas Wind Energy, accessed December 6, 2015.
5 Nielsen-Gammon, John, Texas State Climatologist, The Climate of Texas, accessed December 6, 2015.
6 U.S. Census Bureau, Population Estimates, State Totals: Vintage 2014, Tables, Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2014 (NST-EST2014-01).
7 U.S. Census Bureau, Statistical Abstract of the United States: 2012, Table 671, Gross Domestic Product Current and Chained (2005) Dollars: 2000-2009.
8 U.S. Department of Commerce, Bureau of Economic Analysis, Regional Data, GDP by State, California, New York, and Texas, for 2012, 2013, and 2014.
9 U.S. Energy Information Administration, U.S. States, Texas, Energy Indicators, accessed December 6, 2015.
10 U.S. Energy Information Administration, State Energy Data System, Table C4, Total End-Use Energy Consumption Estimates, 2013.
11 U.S. Energy Information Administration, State Energy Data System, Table C10, Energy Consumption Estimates by End-Use Sector, Ranked by State, 2013.
12 Netstate, The Economy of Texas (June 13, 2015).
13 U.S. Energy Information Administration, Manufacturing Energy Consumption Survey, Table 3.2, Fuel Consumption 2010.
14 U.S. Energy Information Administration, State Energy Data System, Table C10, Energy Consumption Estimates by End-Use Sector, Ranked by State, 2013.
15 U.S. Census Bureau, Table 1098: State Motor Vehicle Registrations, 1990-2009.
16 U.S. Energy Information Administration, Household Energy Use in Texas, accessed December 7, 2015.
17 Nielsen-Gammon, John, Texas State Climatologist, The Climate of Texas, accessed December 6, 2015.
18 U.S. Energy Information Administration, Crude Oil Proved Reserves, Reserve Changes, and Production, 2009-14.
19 U.S. Energy Information Administration, Top 100 U.S. Oil & Gas Fields (March 2015), p. 5-7.
20 U.S. Energy Information Administration, Crude Oil Production, 2009-14.
21 U.S. Energy Information Administration, Petroleum & Other Liquids, Table Definitions, Sources, and Explanatory Notes, West Texas Intermediate (WTI – Cushing), accessed December 7, 2015.
22 U.S. Energy Information Administration, “Crude oils have different quality characteristics,” Today in Energy (July 16, 2012).
23Wooster, Robert, and Christine M. Sanders, “Spindletop Oilfield,” The Handbook of Texas Online, Texas State Historical Association (June 15, 2010).
24 Kim, Eugene, Texas Oil and Gas, p. 3-3, accessed December 6, 2015.
25 U.S. Energy Information Administration, Texas Field Production of Crude Oil (Annual, Thousand Barrels per Day), 1981-2014.
26 U.S. Energy Information Administration, Refinery Capacity Report, Table 3, Capacity of Operable Petroleum Refineries by State as of January 1, 2015, p. 17-22.
27 U.S. Energy Information Administration, Number and Capacity of Petroleum Refineries, Atmospheric Crude Oil Distillation Operable Capacity, Annual (as of January 1), 2009-15.
28 U.S. Energy Information Administration, “Much of the country’s refinery capacity is concentrated along the Gulf Coast,” Today in Energy (July 19, 2012).
29 U.S. Energy Information Administration, Oil: Crude and Petroleum Products Explained, Refining Crude Oil, accessed December 7, 2015.
30 U.S. Energy Information Administration, Refinery Net Production, Texas Gulf Coast, Annual Thousand Barrels, 2009-14.
31 U.S. Energy Information Administration, Crude Oil Input Qualities, API Gravity, Annual, 2009-14.
32 U.S. Energy Information Administration, Crude Oil Input Qualities, Sulfur Content, Annual, 2009-14.
33 U.S. Energy Information Administration, “PADD regions enable regional analysis of petroleum product supply and movements,” Today in Energy (February 7, 2012).
34 U.S. Department of Energy, Office of Fossil Energy, SPR Quick Facts and FAQs, accessed December 7, 2015.
35 U.S. Energy Information Administration, State Energy Data System, Table C11, Energy Consumption Estimates by Source, Ranked by State, 2013.
36 U.S. Census Bureau, Population Estimates, Vintage 2013, Tables, Annual Estimates of the Resident Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 to July 1, 2013 (NST-EST2013-01).
37 U.S. Energy Information Administration, State Energy Data System, Table C2, Energy Consumption Estimates for Major Energy Sources in Physical Units, 2013.
38 U.S. Energy Information Administration, State Energy Data System, Table F12, Liquefied Petroleum Gases Consumption Estimates, 2013.
39 Texas Comptroller of Public Accounts, The Energy Report (May 2008), Chapter 6, Liquified Petroleum Gas.
40 American Petroleum Institute, “U.S. Gasoline Requirements” (June 2015).
41 U.S. Energy Information Administration, Natural Gas Gross Withdrawals and Production, Marketed Production, Annual-Million Cubic Feet, 2009-14.
42 U.S. Energy Information Administration, Top 100 U.S. Oil & Gas Fields (March 2015), p. 8-10.
43 U.S. Energy Information Administration, Texas Natural Gas Marketed Production (Million Cubic Feet), 1967-2014 (November 30, 2014).
44 Hiller, Jennifer, “Eagle Ford Shale Tops Texas List of Top Crude, Gas Producers,” Fuel Fix (August 1, 2015).
45 U.S. Energy Information Administration, “Shale Gas Provides Largest Share of U.S. Natural Gas Production in 2013,” Today in Energy (November 25, 2014).
46 Texas Railroad Commission, Major Oil & Gas Formations, see: Barnett Shale Information, Eagle Ford Shale Information, Haynesville/Bossier Shale Information (November 18, 2015).
47 Texas Railroad Commission, Eagle Ford Shale Information (November 18, 2015).
48 U.S. Energy Information Administration, Natural Gas Reserves Summary as of Dec. 31, Dry Natural Gas, Annual 2009-14.
49 Texas State Library and Archives Commission, Hazardous Business: Industry, Regulation and the Texas Railroad Commission, Other Responsibilities (August 18, 2011).
50 U.S. Energy Information Administration, International & Interstate Movements of Natural Gas by State, Texas, Annual 2009-14.
51 U.S. Energy Information Administration, Natural Gas Market Centers and Hubs in Relation to Major Natural Gas Transportation Corridors, 2009.
52 U.S. Federal Energy Regulatory Commission, North American LNG Import/Export Terminals (October 20, 2015).
53 Macquarie, “Macquarie Energy and Freeport LNG Expansion, L.P., to Jointly Develop U.S. LNG Export Project,” Press Release (November 22, 2010).
54 Moore, Sarah, “Sabine Pass Terminal Gets its First Shipment of LNG,” Fuel Fix (October 22, 2010).
55 U.S. Department of Energy, Office of Fossil Energy, Long Term Applications Received by DOE/FE to Export Domestically Produced LNG from the Lower-48 States (as of December 4, 2015).
56 “EIA: LNG Export Terminals Under Construction, More Planned,” OilOnLine Press (April 17, 2015).
57 U.S. Energy Information Administration, Underground Natural Gas Storage Capacity, Total Storage Capacity, Annual, 2008-13.
58 U.S. Energy Information Administration, Underground Natural Gas Storage Capacity, Total Number of Existing Fields, Annual, 2008-13.
59 U.S. Energy Information Administration, Underground Natural Gas Storage Capacity, Number of Depleted Fields, Annual, 2008-13.
60 U.S. Energy Information Administration, Underground Natural Gas Storage Capacity, Number of Existing Salt Caverns, 2008-13.
61 U.S. Energy Information Administration, Texas Natural Gas Underground Storage Volume, January 1990-October 2015.
62 U.S. Energy Information Administration, Natural Gas Consumption by End-Use, Total Consumption, Annual, 2009-14.
63 U.S. Energy Information Administration, Natural Gas Consumption by End-Use, Texas, Annual, 2009-14.
64 U.S. Energy Information Administration, Natural Gas Consumption by End Use, Volumes Delivered to Industrial Consumers, Annual, 2009-14.
65 U.S. Energy Information Administration, Natural Gas Consumption by End Use, Volumes Delivered to Electric Power Consumers, Annual, 2009-14.