The virtual explosion in Texas’ production of natural gas and oil, thanks to fracking, caught even Citigroup off-guard. In February it apologized for so widely missing the mark in its report the previous year entitled “Energy 2020: Independence Day”:
Momentum toward North American energy independence accelerated last year  well beyond the wildest dreams of any analyst and well above the forecast we made in our first [report] entitled “Energy 2020: North America, the New Middle East?”…
So far, the results have been stunning.… In the decade through last year … natural gas use … grew by a phenomenal 47%, ending coals’ century-long domination….
Starting this year, North American output should start to have a tangible effect both on global prices and trading patterns and will eventually turn the global geopolitics of energy on its head.
In their update due next February, another apology will likely be forthcoming from the company’s next report: “Saudi Texas” has broken nearly every production record just since the first of the year, and it appears to have every opportunity to continue to do so into the foreseeable future.
For instance, this September saw Texas pump an average of 2.7 million barrels of crude oil every day, “the highest daily oil output in the Lone Star State in any single month since at least January 1981,” according to energy analyst and economist Mark Perry. Oil production in Texas has more than doubled in less than three years, with both the Eagle Ford and the Permian Basin formations generating a million barrels every day. There are only nine other oil fields in history that have produced that much.
Perry pointed out:
In mid-2009, Texas was producing less than 20% of America’s domestic crude oil. The recent gusher of unconventional oil being produced in the Eagle Ford Shale and Permian Basin oil fields of Texas, thanks to breakthrough drilling technologies, has recently pushed the Lone Star State’s share of domestic crude oil above 30% in each of the last 17 months, and all the way up to 35% of America’s crude output in both August and September.
This prodigious production now puts Texas in the top 10 of oil-producing nations in the world, just slightly behind Kuwait. There are 1,000 new jobs being created in Texas every day, and at the current rate of increase, Texas’ production of crude oil is expected to exceed three million barrels per day early next year, and four million less than a year later. As Perry noted:
With those projected increases in Texas output, the state could soon surpass Kuwait, United Arab Emirates (UAE), Iraq, Iran and even Canada to move up in the international production rankings to become the world’s No. 5 or No. 6 oil producer within the next few years.
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