Energy
Texas oil and natural gas industry continues to break records
From The Center Square
By
Texas’ oil and natural gas industry broke new production records in May, continuing a trend in recent months and years.
Texas’ production of oil, natural gas, and natural gas liquids (NGLs), refinery activity and exports reached new record highs last month, according to a new analysis published by the Texas Oil & Gas Association (TXOGA).
The industry produced a record-high 5.7 million barrels per day (mb/d) of crude oil in Texas, a record 32.5 billion cubic feet per day (bcf/d) of natural gas marketed production and 3.5 mb/d of NGLs, according to estimates made by TXOGA’s Chief Economist Dean Foreman, Ph.D.
This is after the Texas oil and natural gas industry established new monthly records in March, according to U.S. Energy Information Administration (EIA) and U.S. International Trade Commission data. In March, Texas reported a record-high NGL field production of 3.7 million mb/d – the highest on record in history – more than doubling in-state consumption, according to the data.
Crude oil production topped 5.6 mb/d; natural gas marketed production topped 32.3 bcf/d. Texas refinery activities also reach a record-high net production of 5.5 mb/d.
Texas’ production of oil and natural gas is unparalleled. No other state is producing the volume that Texas is.
This is after Texas’ petroleum products exports exceeded 4 million barrels per day for the first time in history last December.
Since then, the Texas oil and natural gas industry has sustained five consecutive months of exporting petroleum products of more than 4 million barrels per day. In the first quarter of 2024, Texas exported nearly $57 billion worth of petroleum products.
The majority of LNG exports went to European and Asia Pacific countries; the majority of crude oil and hydrocarbon gas liquids were exported to Asia Pacific countries, according to the data.
Foreman said that Texas’ record-setting performance has continued “on the heels of remarkable productivity gains,” with rig productivity in May increasing by more than 20% year-over-year, according to EIA estimates. “As a result, Texas has continued to gain market share amid U.S. oil and natural gas production through the first half of 2024. U.S. energy security increasingly depends on Texas, and Texas has stepped up like none other.”
Projections for June show Texas’ production remains historically strong, holding at 5.7 mb/d of crude oil, 3.6 mb/d of NGLs, and 32.4 bcf/d of natural gas marketed production, according to Foreman’s estimates.
In the first half of 2024, Texas produced an estimated nearly 43% of all domestically produced crude oil and more than 28% of all domestic natural gas marketed production, according to TXOGA estimates.
Thermal and dispatchable sources of energy, primarily natural gas, are generating the majority of electricity Texans use through Texas’ grid managed by the Electric Reliability Council of Texas (ERCOT). During Winter Storm Heather, from Jan. 13-16, thermal and dispatchable sources generated as much as 95% of ERCOT’s electricity.
During another high demand period, from March 21-22, thermal and dispatchable sources, primarily natural gas, generated over 90% of ERCOT’s electricity for nine consecutive hours, averaging 91.8% of the region’s power, according to ERCOT and EIA data.
“These new records are a testament to Texas’ role as a national and global energy leader,” TXOGA President Todd Staples said. “Amidst growing global instability and energy demand that is expected to nearly double by 2050, oil and natural gas continue to serve as the bedrock of our energy mix, providing affordable reliable energy to meet our state, nation, and the world’s needs.”
From the Canadian Energy Centre
By Will Gibson
Alberta oil sands projects poised to grow on lower costs, strong reserves
As geopolitical uncertainty ripples through global energy markets, a new report says Alberta’s oil sands sector is positioned to grow thanks to its lower costs.
Enverus Intelligence Research’s annual Oil Sands Play Fundamentals forecasts producers will boost output by 400,000 barrels per day (bbls/d) by the end of this decade through expansions of current operations.
“Existing oil sands projects deliver some of the lowest-breakeven oil in North America at WTI prices lower than $50 U.S. dollars,” said Trevor Rix, a director with the Calgary-based research firm, a subsidiary of Enverus which is headquartered in Texas with operations in Europe and Asia.
Alberta’s oil sands currently produce about 3.4 million bbls/d. Individual companies have disclosed combined proven reserves of about 30 billion barrels, or more than 20 years of current production.
A recent sector-wide reserves analysis by McDaniel & Associates found the oil sands holds about 167 billion barrels of reserves, compared to about 20 billion barrels in Texas.
While trade tensions and sustained oil price declines may marginally slow oil sands growth in the short term, most projects have already had significant capital invested and can withstand some volatility.
Cenovus Energy’s Christina Lake oil sands project. Photo courtesy Cenovus Energy
“While it takes a large amount of out-of-pocket capital to start an oil sands operation, they are very cost effective after that initial investment,” said veteran S&P Global analyst Kevin Birn.
“Optimization,” where companies tweak existing operations for more efficient output, has dominated oil sands growth for the past eight years, he said. These efforts have also resulted in lower cost structures.
“That’s largely shielded the oil sands from some of the inflationary costs we’ve seen in other upstream production,” Birn said.
Added pipeline capacity through expansion of the Trans Mountain system and Enbridge’s Mainline have added an incentive to expand production, Rix said.
The increased production will also spur growth in regions of western Canada, including the Montney and Duvernay, which Enverus analysts previously highlighted as increasingly crucial to meet rising worldwide energy demand.
“Increased oil sands production will see demand increase for condensate, which is used as diluent to ship bitumen by pipeline, which has positive implications for growth in drilling in liquids-rich regions such as the Montney and Duvernay,” Rix said.
“If Ottawa had it’s way Albertans would be left to freeze in the dark”
The ineffective federal net-zero electricity regulations will not reduce emissions or benefit Albertans but will increase costs and lead to supply shortages.
The risk of power outages during a hot summer or the depths of harsh winter cold snaps, are not unrealistic outcomes if these regulations are implemented. According to the Alberta Electric System Operator’s analysis, the regulations in question would make Alberta’s electricity system more than 100 times less reliable than the province’s supply adequacy standard. Albertans expect their electricity to remain affordable and reliable, but implementation of these regulations could increase costs by a staggering 35 per cent.
Canada’s constitution is clear. Provinces have exclusive jurisdiction over the development, conservation and management of sites and facilities in the province for the generation and production of electrical energy. That is why Alberta’s government is referring the constitutionality of the federal government’s recent net-zero electricity regulations to the Court of Appeal of Alberta.
“The federal government refused to work collaboratively or listen to Canadians while developing these regulations. The results are ineffective, unachievable and irresponsible, and place Albertans’ livelihoods – and more importantly, lives – at significant risk. Our government will not accept unconstitutional net-zero regulations that leave Albertans vulnerable to blackouts in the middle of summer and winter when they need electricity the most.”
“The introduction of the Clean Electricity Regulations in Alberta by the federal government is another example of dangerous federal overreach. These regulations will create unpredictable power outages in the months when Albertans need reliable energy the most. They will also cause power prices to soar in Alberta, which will hit our vulnerable the hardest.”
Finalized in December 2024, the federal electricity regulations impose strict carbon limits on fossil fuel power, in an attempt to force a net-zero grid, an unachievable target given current technology and infrastructure. The reliance on unproven technologies makes it almost impossible to operate natural gas plants without costly upgrades, threatening investment, grid reliability, and Alberta’s energy security.
“Ottawa’s electricity regulations will leave Albertans in the dark. They aren’t about reducing emissions – they are unconstitutional, ideological activist policies based on standards that can’t be met and technology that doesn’t exist. It will drive away investment and punish businesses, provinces and families for using natural gas for reliable, dispatchable power. We will not put families at risk from safety and affordability impacts – rationing power during the coldest days of the year – and we will continue to stand up for Albertans.”
“Albertans depend on electricity to provide for their families, power their businesses and pursue their dreams. The federal government’s Clean Electricity Regulations threaten both the affordability and reliability of our power grid, and we will not stand by as these regulations put the well-being of Albertans at risk.”
Related information
- Conference Board of Canada socio-economic Impacts of Canada’s 2030 Emissions Reduction Plan – (April 2025)
- Alberta Electric System Operator’s position on Canadian Energy Regulations
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