The Center Square, November 8,2022
By: Bethany Blankley
Gas prices remain high and projected diesel shortages are expected, but they’d be worse if Texas’ workforce weren’t producing the bulk of America’s energy supply, Gov. Greg Abbott and others argue.
Oil and natural gas extraction and production occur primarily on private land under state regulatory authority. This is one of the reasons Texas leads in oil and natural gas production and provides the lion’s share of U.S. energy supply coming from the Permian Basin in West Texas and Eagle Ford Shale in South Texas.
But a Biden administration plan to impose a 2015 EPA methane rule in certain areas of the Permian Basin in West Texas—the largest crude-producing region in Texas – if implemented, could jeopardize a quarter of the U.S. gasoline supply, Abbott argues.
The EPA plan is “based on illogical and flawed grounds,” Abbott argues, and is designed to end fossil fuels. If implemented, he said it would detrimentally impact Americans struggling with 40-year-high inflation and drive gas prices even higher.
His Democratic challenger, Robert “Beto” O’Rourke, takes a different perspective, promising to raise taxes on corporations and import the Biden administration’s philosophy on fossil fuels.
On his campaign website, O’Rourke said that, as energy consumers want cleaner energy, “it’s becoming clear that we will soon lose our leadership in oil and gas if we don’t work seriously to remove emissions from the industry and better protect our air, water, and public lands.”
To protect the industry, Abbott issued an executive order directing all state agencies to use “all lawful powers and tools to challenge any federal action that threatens the continued strength, vitality, and independence of the energy industry.” He said, “Texas is a pro-energy state, and we will not sit idly by and allow the Biden administration or local governments to destroy jobs and raise energy costs for Texas families.”
While the oil and natural gas industry has been hamstrung in other states by federal policies supported by Democrats, including O’Rourke, Texas continues to lead the U.S. in oil and natural gas production.
If Texas were its own country, it would be the world’s third-largest producer of natural gas and the fourth-largest oil producer.
Texas helped catapult the U.S. to produce a record 12,289 million barrels per day (bpd) of crude oil in 2019. The U.S. Energy Information Agency (EIA) projects this to increase to 12.99 million bpd in 2023.
By December 2021, Texas was producing 4.988 million bpd due to increased production in the Permian Basin and Eagle Ford Shale. The EIA projects that in November, Permian output will increase to a record 5.453 million bpd, and Eagle Ford output will increase to 1.226 million bpd—the formation’s highest production level since April 2020.
Overall, the EIA projects total U.S. crude oil production to increase by 104,000 bpd, topping 9.105 million bpd in November, the highest output since March 2020.
The oil and natural gas industry also helped Texas lead the U.S. in job growth and paid a record amount of $10 billion in sales taxes in FY22— the highest amount it paid in Texas history.
Last month, Texas continued to lead the U.S. in job creation, outpacing the national job growth rate for 15 consecutive months. In June, Texas added the greatest number of oil and natural gas jobs in U.S. history. In July, upstream jobs topped 200,000 for the first time since March 2020. By September, they exceeded 202,900, increasing by 20.8% from September 2021.
The industry’s also pouring more money into research and development and lower emissions technology, Todd Staples, president of the Texas Oil & Gas Association, says. He maintains that oil and natural gas produced in Texas are among the cleanest in the world and that state and federal policies must foster critical infrastructure projects and expand domestic production to secure U.S. energy independence.
Midland-based Oil and Gas Workers Association board member Richard Welch told The Center Square the industry’s job creation and output would be even higher if the Biden administration wasn’t trying to clamp down on production in the Permian. While Abbott has taken action to protect the industry, investment isn’t what it could be to boost even more production and job creation, he says.
“The jobs market in the oil and gas sector could be a lot higher without the constant bombardment from the Biden administration’s weaponized EPA’s scrutinization of the industry,” Welch said. “Individual drillers are maxed out on equipment. Independent drillers make up 50% of the current operations in the Permian Basin yet only own 20% of the equipment.”
After the state comptroller took action against financial companies enacting ESG policies, Welch is hoping the state legislature will consider ways to help the industry. This includes banning ESG and providing other incentives to enable investors to expand production and refining capacity.
Ed Longanecker, president of the Texas Independent Producers & Royalty Owners Association, also maintains that federal and state policies must foster investment in energy infrastructure, including LNG export terminals, pipelines and refineries. He says a long-term strategy is needed “to address our growing energy needs in coordination with Texas oil and gas producers who are ready to meet this challenge.”
President Biden and others “constantly pointing the finger at energy producers will not lower global prices,” he adds. “Oil and gas companies are price takers, not price makers. Global energy markets determine the costs of petroleum products.” He says policies that “address U.S. supply of oil and gas resources are what America really needs.” These include “tackling production variables [like] streamlining permitting processes for additional infrastructure or increasing onshore and offshore development opportunities,” among others.