?Get out of the way! “Comparing this year’s Texas energy statistics to last year’s shows some staggering indications of change,” says Karr Ingham, economist, speaking at a recent Texas Alliance of Energy Producers meeting.
This June, oil was selling for $130 a barrel. Last year’s June price was a modest $64. In June 1995, it was $16.74, according Ingham’s Texas Petro Index. The short timespan, step-change increase, and the conviction that the price will stay above $100 indefinitely, are a complete break from the past multi-decade norm.
The study also shows the June Texas rig-count monthly average was 923, up from 834 a year earlier, a 10.7% gain. Also up, year-on-year, were drilling permits (25.2%) and E&P employment (6.5%). Average gas prices rose to $11 per thousand cubic feet, up from $7.42 a year earlier, a 48.9% gain. Oil was up 104.8%.
Meanwhile, there may be “an institutional shift away from oil to natural gas,” says Ingham, as Texas gas-well completions totaled 4,958 (up 13%) in June, compared with 4,389 in June 2007. Oil-well completions fell to 2,561 (down 4.9%) from 2,692 a year earlier. Also, oil production fell 0.4% while gas volumes increased 2.8%.
Because energy markets are operating efficiently for the most part, Ingham has some advice for presidential candidates. “Here’s my energy policy: Get out of the way!”
Drill NOW! The Texas Alliance of Energy Producers and the Foundation for Energy Education began a Texas statewide energy education program in early August to advocate the use of America’s energy to displace foreign oil.
The theme of the campaign is “Drill NOW! Produce MORE!,” according to Alliance president Alex Mills. “About 85% of the federal land available for exploration has been taken off limits by the federal government. We believe the industry’s great environmental record since 1969 shows that offshore drilling has become environmentally friendly with the recent technological advancements.”
Mills notes that, during or following hurricanes Katrina and Rita, which destroyed 115 offshore platforms and damaged 52 more in the Gulf of Mexico in 2005, there was no major spill, according to the Minerals Management Service (MMS).
“Furthermore, the U.S. Coast Guard and the MMS report that only 3% of the oil spilled offshore comes from drilling and production platforms while 45% comes from shipping vessels, many of which bring 10 million barrels of imported crude oil into the U.S. every day,” Mills says.
Alliance director of professional development, Kurt Abraham, says the initial campaign will focus on East Texas, especially in the Tyler, Kilgore, Longview and Marshall areas.
“East Texas has a rich and proud history,” Abraham says. “But many people don’t realize how important America’s oil and gas production is to our economic and national security. For example, one of the radio commercials points out that America’s economy loses $2 billion every day to foreign countries where we import crude oil. That’s about $700 billion each year that is going out of the country, but could have been creating jobs and paying taxes here at home.” JS
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