The state’s oil and gas boom roared ahead in July, boosting an industry index to record levels. The Texas Petro Index rose to 287.7 for the month, beating the previous all-time high of 287.6 in September and October 2008, according to economist Karr Ingham, who created the index for the Texas Alliance of Energy Producers. Ingham began the index in January 1995 with a base number of 100.
The index measures growth in key aspects of the energy industry, including crude oil and natural gas prices, rig counts, drilling permits, oil and gas production rates and employment. “The monthly crude oil price rose by more than $9 per barrel in July, to average more than $100 per barrel for the first time since March 2012,” Ingham said. The number of original drilling permits issued rose by more than 18 percent in July compared with the same month a year earlier, while oil and gas industry employment rose by more than 6 percent, he said. Ingham attributed the higher oil prices in part to political instability and social unrest in the Middle East. But he said that as U.S. producers continue to ramp up domestic oil production and reserves, dependence on foreign oil “is being dramatically reduced.”
SOME KEY NUMBERS CRUNCHED IN THE INDEX
Crude oil production in Texas totaled an estimated 67.7 million barrels, a 14.1 percent increase over July 2012;
Oil wellhead prices averaged $101.27 a barrel, about 20 percent more than the year-earlier month;
The state’s estimated natural gas output was almost 634.4 billion cubic feet, a 6.3 percent year-over-year monthly decline, but prices averaged $3.63 per thousand cubic feet, almost 34 percent higher than in July 2012;
The Baker Hughes count of active drilling rigs in Texas averaged 841, down from the 910 operating in July 2012;
Texans on oil and gas payrolls reached a record 280,500, according to statistical methods using Texas Workforce Commission data.
Ingham said the index rose from 2002 to 2008, buoyed by rising oil and gas prices, rig count and employment. Prices peaked in 2008 and then “went almost straight down and bottomed out all the way through 2009. It was a sharp contraction in Texas, then we were off again. What has been the most fascinating aspect for me,” he said, “is that at the start of the recovery, even though crude oil prices were high, it was a natural gas expansion. Eighty percent or more of the rigs in Texas were drilling for natural gas.”
Now, he said, “it’s an oil-driven expansion. Nobody thought in 2008 that we would actually begin to increase crude oil production in Texas or nationally.”
SOURCE: BY VICKI VAUGHAN, San Antonio Express News