Texas upstream petroleum economy sustains record run

The upstream oil and gas economy in Texas ventured further into uncharted territory in February, as rapidly increasing production, higher wellhead prices, and revised statewide employment numbers boosted the Texas Petro Index (TPI) to a record 300.6.

“Texas producers increased oil output by more than 22% in February compared to February 2013, and natural gas production was up about 1.0%,” said Karr Ingham, the economist who created the TPI and updates it monthly.

“Combined with higher wellhead prices for both commodities, the value of oil and gas produced in Texas during February increased by more than $2.85 bn in the past year to about $10.63 bn.”

Ingham noted that Texas producers recovered about 2.75 MMbpd of crude oil during February, “the most since 1980.”

Ingham said revised statewide employment estimates by the Texas Workforce Commission indicated the oil and gas industry continues to hire new workers at an impressive pace, faster than even the stout growth in prior years.

“In 2012, workforce commissioners revised total upstream payroll employment upward by about 3,200 jobs to more than 270,000 jobs, which reflected a growth rate of 10.2% at yearend compared to yearend 2011,” Ingham said. “In 2013, another 10,000 jobs were added to upstream oil and gas company payrolls, and that job growth has escalated in early 2014.

“At yearend 2013, the year-over-year rate of industry employment growth was about 3.7%; in February, the year-over-year rate of industry employment growth was nearly 5%, with about 13,400 jobs added over the last 12 months,” he said. “Since the industry downturn in 2009, about 103,000 jobs have been added to upstream oil and gas company payrolls.”

A composite index based upon a comprehensive group of upstream economic indicators, the Texas Petro Index in February moved above 300.0 for the first time to a record 300.6, up 7.6% compared to February 2013.  Before the current economic expansion, the TPI’s previous all-time high of 287.6 occurred in September and October 2008, after which the TPI declined to 188.5 in December 2009 before embarking upon the current growth cycle.

The Texas Petro Index is a service of the Texas Alliance of Energy Producers, the nation’s largest state association of independent oil and gas producers.

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