EnergyIssuesTexas’ Decade of Booming Energy Production Powered by Oil, Gas, and Wind

A look back at what spurred the greatest energy decade in Texas history.
December 31, 2019
Texas has gone through quite a transformation in the past 10 years. Its population grew 15 percent to just under 30 million people.

During the same time frame, the total gross domestic product grew 46 percent — with 2019’s total yet to be fully calculated.

And the number of unemployed Texans dropped by over 50 percent — remaining at record lows for much of 2019.

Each of these metrics reflects the growth and prosperity the Lone Star State has experienced and sustained over the last decade and beyond. But the most reflective measure of Texas’ success may very well be through the scope of its energy industry.

From 2010 to 2018, Texas increased its power generation by nearly 16 percent — a numerical increase of over 65 million Gigawatts.

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In comparison, the rest of the United States saw a decrease during the same timeframe of 15 million Gigawatts.

During that same time frame, the average price dropped .86 cents per kilowatt-hour as the number of customers in Texas increased by 1.7 million. For comparison, the average price in the United States increased by .70 cents per kilowatt-hour as the number of customers increased by 9.2 million.

The increased affordability of electricity in Texas was driven in part by the increase in fuel extraction efficiency.

Crude oil production in Texas increased by 920 million barrels (bbl) from 2010 to 2018. And so far this year (January to September), oil production is already 17 percent above the same point in 2018.

For natural gas, from 2010 to 2018 the number of producing wells decreased by a few thousand while production increased 1.25 trillion mcf (thousands of cubic feet). Gas production from January to September of this year is already 32 percent higher than the same time frame from last year.

Wind energy has also experienced its own boom. 

A 188 percent increase from wind energy over the past 10 years has it providing 20 percent of our electricity (this does not include the other, not electrical ways energy powers our lives) in Texas. This year, from January to October, electricity generated from wind is 11 percent higher than that same period in 2018.

Texas does have a “Renewable Generation Requirement” — a minimum amount of renewable energy production — but the current production has far surpassed the threshold.

All the while production has increased drastically this decade in Texas, emissions from the energy sector have decreased. From 2010 to 2018, carbon dioxide emissions decreased 8 percent, nitrogen oxide gas emissions dropped 16 percent, and sulfur dioxide emissions decreased a whopping 53 percent.

Meanwhile, Texas’ energy sector employment grew 32 percent and today, Texas accounts for over one-third of American energy jobs.

Based on the best approximation available from the Texas Comptroller’s Office, Texas’ energy industry amounts to 15 percent of the state’s real GDP (inflation-adjusted).

That’s about a 77 percent increase in energy sector real GDP from 2010 to 2018. 

In the same time, Texas’ overall GDP grew by 31 percent.

The story behind this prosperous decade is not solely organic. A few notable things happened to buttress the trend.

Don Hooper, president of Soar Energy in Houston, told The Texan, “The most significant contributor is the lifting of the crude oil export ban.”

Since 1975, America had barred exporting oil abroad. It was established in response to an OPEC embargo on exports to the U.S., which caused the oil crisis of 1973 — most notably causing automobile gasoline prices to spike.

Back when the U.S. was not the staunch energy producer it is today, it chose to appease the powerful OPEC and end the crisis.

The United States’ ban lasted until 2015 when President Obama and former House Speaker Paul Ryan (R-WI) added the ban’s repeal as a rider into the spending bill. Since then, it’s been full speed ahead exporting our black gold to the rest of the globe.

Hooper recalled this monumental moment for the industry and described how then-Speaker Ryan called his colleague while they were at dinner together, asking what should be added to the continuing resolution. The lifting of the export ban was (somewhat jokingly) proposed, and much to the surprise of Hooper, the request was granted.

Ed Longanecker, president of Texas Independent Producers & Royalty Owners Association (TIPRO), echoed Hooper, saying, “This bi-partisan policy accomplishment enabled many significant milestones to come to fruition in recent years, including the U.S. officially becoming the world’s largest producer of oil and natural gas, with Texas accounting for 40 percent and 25 percent, respectively.”

Without the repeal, Longanecker emphasized, Texas and U.S. production would be “half of current oil production rates, greatly diminishing the industry’s economic impact and achievements made with regard to national security.”

Another aspect Longanecker pointed to is Texas’ steady liquefied-natural gas (LNG) business. 

He marked the first LNG shipment from Cheniere Energy’s Corpus Christi facility in 2018 as a major milestone.

Since then, Germany has opened up its energy market to American gas companies and former U.S. Energy Secretary Rick Perry secured a 24-year partnership with Poland to ween them off Russia’s gas supply.

Increasing usage of LNG, Longanecker notes, has resulted in a drastic decrease in emissions. This comes from choosing lower-emission LNG over high-emission sources such as coal.

Spearheading both the oil and gas production booms are stark technological drilling improvements.

The main improvement has been through efficiency. And extracting higher quality oil is made possible by improved techniques.

Through the latter half of the decade, Texas is producing 97 percent more 40.1 to 50.0 degrees API gravity crude as opposed to 67 percent more 30.1 to 40.0 degrees. API gravity indicates the proportion of light hydrocarbons as opposed to heavy in the oil extracted. Hooper pointed to this as another measure for the improving oil industry.

Additionally, from the beginning of the decade to the end higher quantities have been able to be extracted both from improved mapping and drilling techniques. 

Hooper stated, “In 2009 and 2010 we were producing on average about 800 to 900 barrels per day. This year, the same type of well produces around 2900 barrels per day.”

That’s a 241 percent increase from the beginning to the end of the decade.

One such innovation was the realization that while fracking, if the well was “porpoised” (moving the drill and piping up and down in a horizontal well), production would decrease 50 percent. 

According to Hooper, avoiding porpoised wells has led to significantly improved production.

As for wind energy, Jeff Clark, president of the Advanced Power Alliance, stated, “The last decade has been one of rapid expansion.” He credited former Governor George Bush for providing the wind power vision which has since been carried out.

“Communities that were previously unfamiliar with wind energy are now looking to it as an economic development opportunity — something that was not there even a decade ago,” Clark continued.

Clark also mentioned the partnership between the renewable industry and oil and gas’ has greatly improved — allowing the two to complement one another. Oil and gas companies are more and more using wind energy to power large parts of their operations such as drilling.

He also cited the federal renewable tax credit, a subsidy that has long been the backbone of the industry. The Renewable Electricity Production Tax Credit (PTC) provides an incentive to companies expanding their wind power capacity.

But Clark sees rapid technological advancement phasing out the need for incentives. Specifically, he pointed to “taller towers, more advanced blade technology, and larger generators inside the turbines” as drivers of this trend for wind.

“Wind and solar are becoming increasingly competitive without incentives, but we live in a world where every form of energy has some sort of incentive or subsidy,” Clark added.

Not all rainbows and sunshine, Texas’ energy sector has ended the decade with a slight regression in employment.

Energy sector employment has dropped as fewer wells are being drilled. But production has not — in fact, production from July to October of this year increased by over 2 million barrels.

Going into the next decade, Brent Bennett — a policy analyst at the Texas Public Policy Foundation’s Life:Powered project — is looking at the significant growth from this past decade and analyzing whether the forecasts derived from the growth will come true.

Currently, oil and gas industry forecasts project even more growth and expansion — specifically stemming from trade. For example, Texas has six new LNG export facilities planned for construction, increasing the export capacity to 10 billion cubic feet per day.

Bennett posited, “How much of that is going to get built and how quickly?”

“That and global demand are really going to determine what our production is [next decade],” he added.

On the wind energy side, pointing to the power emergencies this past summer attributed to reliability issues, Bennett asked, “When are things going to break?”

“Our electricity demand is rising two percent per year, but we’re still not planning on increasing our fossil fuel capacity in the foreseeable future,” he added.

“ERCOT (Electric Reliability Council of Texas) believes enough wind power will be generated to cover the increase, but history has not been kind to those predictions.”

Longanecker also pointed to the outcome of the trade war with China as something that will have a potentially profound effect on the American and Texas energy industry.

From an energy perspective, Texas is emerging from the greatest decade in its history. Continued growth looks to be the trajectory going forward. 

But, as the old saying goes, “Nothing in life is guaranteed except death and taxes.”


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.