Ingham: Oil, Gas Sector Strong in 2013, Leading to Economic Growth
Oil and gas producers in Texas had one of their best years ever in 2013, according to the Texas Petro Index (TPI) released Wednesday. As the energy industry in Texas continues to put the doldrums of 2009 behind it, the industry is helping to create many new jobs as well.
The TPI, which is a composite index taken from a comprehensive group of upstream economic indicators, peaked at 295 in December. That was the fourth straight month of new record highs. The last high was reached during the period of September to October 2008. Following that peak, the TPI went into a slide that saw the index fall to 188.5 in December 2009 during the severe economic recession before beginning the current growth cycle.
The growth in 2013 was driven by crude oil production, although higher natural gas wellhead prices also lifted the bottom line, according to petroleum economist Karr Ingham, who created and maintains the TPI. It was particularly impressive given that most natural gas was recovered during oil production.
“The statewide upstream oil and gas economy in July finally recovered fully from the nadir of December 2009 and surpassed the previous peak TPI (287.6) achieved in the late fall 2008,” Ingham said. “Although most indicators of industry activity were higher at year-end 2013, compared to the prior year, the story of the year was crude oil production in Texas.”
Growth in over the past two years has been substantial, Ingham said.
“By our estimates, statewide crude oil production grew by about 21 percent in 2013 compared to 2012, which in turn was up more than 34 percent compared to the prior year,” Ingham said. “And those increases are part of a trend that has been underway for several years.”
By the end of 2013, the TPI was up 6.7 compared to one year earlier, despite a 2013 drop in the rig count of 7.1 percent, compared with 2012. In 2013, there were 21,471 drilling permits issued, the Texas Railroad Commission said, compared with the 22,479 permits that were issued in 2012.
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