Texas Set To Overtake Iraq In Oil Production

America's increasing reliance on hydraulic fracturing to recover energy trapped in shale will soon lead Texas to generate more oil than Iraq, OPEC's No. 2 producer.

Texas produced just over 3 million barrels a day in April for the first time in nearly four decades, according to a new report by the U.S. Energy Information Administration (EIA). That accounted for 36 percent of the United States' total production for the month -- 8.4 billion barrels per day.

Iraq, meanwhile, produced an estimated 3.2 million barrels a day in April.

The EIA report said Texas' output has more than doubled overall in the past three years and has risen every month since 2011. Therefore, the report concluded, Texas is soon expected to out produce Iraq.

The EIA attributed the increased production to the Eagle Ford Shale in West Texas. There, it said, "drilling has increasingly targeted oil-rich areas, and multiple reservoirs within the Permian Basin in West Texas that have seen a significant increase in horizontal, oil-directed drilling."

Another reason, of course, is hydraulic fracturing, or fracking. The United States was the first country to exploit the practice to extract both gas and oil from shale. As a result, U.S. energy production now makes up more than 10 percent of total world production, according to the EIA.

The report says the United States will be producing more oil than it uses, and so will become a net exporter of oil by 2020.

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Meanwhile, other West Texas oil fields are contributing mightily to Texas' oil production and immediate economic future. A recent report by the Institute for Economic Development at the University of Texas-San Antonio said the economic output from West Texas Cline Shale would rise by $20.5 billion by 2022.

Thomas Tunstall, the institute's research director, said his study focused on 10 counties in the eastern part of Texas' oil-rich Permian Basin, somewhat removed from the center of the region's oil and gas recovery activities.

"One of the things we find is there are three significant shale formations in the Permian Basin: the Wolfberry/Spraberry, the Cline and the Wolf Camp," Tunstall said. "Most of the activity right now is targeted on the Spraberry formation, west of our study area, although we expect to see a lot of that activity move eastward over to the Cline Shale over time."

The EIA's drilling productivity report for June estimated that gas production was flat at just over 1.5 million barrels a day, but that gas production was up from 5.48 billion cubic feet per day in May to 5.62 billion cubic feet per day in June.

And by 2022, the EIA report said, oil and gas development will create 30,000 jobs in the region, at a value of $20.5 billion.

By Andy Tully of Oilprice.com