DALLAS (WBAP/KLIF News) – The plunging cost of extracting oil from the ground is about to make Texas the third largest oil producer in the world behind Russia and Saudi Arabia. While those nations are approaching their maximum production limits, by next year Texas will more than double its annual output from five years ago.
Bob McNally, president of the Rapidan Energy Group consulting firm, said it’s a blessing for the global economy and he explained the reason for it: “The industry cracked the code on fracking.”
Some industry experts believe the Permian Basin in West Texas rivals the amount of oil in the Ghawar Field in Saudi Arabia, the largest conventional oil field in the world. Together the Permian and the Eagle Ford shale field in South Texas are expected to more than double production next year from 2.5 million barrels per day in 2014 to 5.6 million barrels per day in 2019. Increased production makes the U.S. less dependent on foreign oil sources and keep prices in check.
The only downside to the Texas production growth is a need for more pipeline and labor. Investment banker HSBC says the Permian is a “victim of its own success” and predicts output will slow in the near future.
