US Oil Production Reaches New High, Texas Producers Ramping Up

U.S. oil output surged to a record 10.47 million barrels per day in March of 2018, and Texas producers told the annual Texas Oil and Gas Association's Energy Summit in San Antonio that they are prepared to increase those numbers, News Radio 1200 WOAI reports.

That's a production increase of some 215,000 barrels per day over the previous record level.

TXOAG President Todd Staples says the key right now is not producing the oil but moving it, and he says investment is underway in pipeline infrastructure out of the Permian Basin and the Eagle Ford.

"We have companies that are investing today, and building pipelines as quickly as they can," he said.

A little less than half of the total U.S. oil production was from Texas, mainly from the Permian Basin, which the largest oil producing region in the country, and from the Eagle Ford, which is among the top five.

Texas is also the country's leading producer of natural gas, and natural gas production also set a record in March, according to the U.S. Energy Information Administration.

Staples says that surge in clean natural gas production is helping drive the nation's largely unexpected manufacturing boom, since natural gas is the fuel of choice for manufacturing facilities, and low cost domestic production has in many cases erased the price advantages that manufacturers once enjoyed by moving their production facilities overseas.

Staples expects the Texas oil boom to continue, and he says, while $70 a barrel oil, which was briefly touched earlier this month, is good for producers, stable prices are even better.

"Stable prices are really what the energy industry is looking for," he said.  "You can plan that way.  The high swings create disruptions everywhere."

Those swings are one reason why Texas production has not ramped up faster as oil prices have increased sharply in the past two months. Many oil producers cut back on infrastructure development during 2016 and 2017 due to low prices, and the industry is currently making up for that in more robust investment.

Texas Comptroller Glenn Hegar told the Energy Summit that, thanks to the resurgent oil and gas industry, the state's 'Rainy Day Fund,' which is replenished by energy severance taxes, has now ballooned back to $11 billion, despite major withdrawals due to last summer's Hurricane Harvey.

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