During the opening session of the annual SEG convention in Houston, Barry Smitherman, chairman of the Texas Railroad Commission (RRC) reviewed the improvement in Texas’ production.
This had been created by the application of new oil industry technology: better imaging, improved geologic understanding, and new fracing technology, he said.
Smitherman noted "these are exciting times", the results of which had decentralized oil production, returned Texas to a major oil-producer status, and reduced the influence of a few global producers.
Led by the Barnett and Eagle Ford shale formations, Texas drilling permit numbers grew to 13,421 in the first half of 2013 from 9716 in 2002. In 2012, the state granted 22,179 permits, according to Smitherman, a number that will likely be exceeded in 2013. The steady growth in permits, with associated drilling and completion, has likewise grown Texas’ oil production to 1.761MM bbl/d during the 1H 2013, up from 2012’s 1.599MM blb/d.
Smitherman noted that oil production could double by 2025, led by Eagle Ford production. Output from the South Texas trend has grown to 598,706 bbl/d during 1H 2013, up from 352b/d in 2008. Production in 2012 was 397,421 bbl/d, which highlights the rapid growth that application of new technology has been able to achieve.
Natural gas production has seen a similar growth path, expanding to 22.6Bcf/d in 1H 2013 from 18.96Bcf/d in 2007, Smitherman continued. Barnett production led this grown, expanding to 5100MMcf/d during 1H 2013, up from only 216MMcf/d in 2000. Texas now is exporting gas to the world; this is a very different scenario from a few years back when Texas was facing the possibility of becoming a net importer, he noted.
Smitherman acknowledged that this growth has its challenges, especially from the EPA, who has challenged the industry for its fracing practices. Notably, the EPA has not proven its allegations and has dropped many of the suits it has brought. The RRC has responded to the added scrutiny with four rule-making intitiatives: disclosure of fracture-fluid contents is now required for all competions, recycling of flow-back fluids is now permitted and encouraged, well integrity rules have been updated to include industry best practice, and regulations on disposal wells have been brought current.
Mr Smitherman left the SEG with a major observation: “Human ingenuity always finds a solution to a problem.”