Texas Railroad Commissioner Discusses State of Oil & Gas Production

Published 01/22 2014 05:38PM

Updated 01/22 2014 06:45PM

Texas Railroad Commissioner Christi Craddick visited Abilene Wednesday morning to discuss the current state and future of the oil and gas industry.

Rep. Susan L. King and the Abilene Chamber of Commerce invited locals and several operators to join the first event speaker series.

Craddick, a Midland native opened the town hall-style meeting with several statistics regarding Texas oil and gas production and its future.

"We don't call it an oil boom anymore, it's now a sustained economic development," states Craddick. "We've been drilling but we really haven't begun."

Texas produced 1.8 million barrels a day last year meaning it's third of what's being produced in the entire country, Craddick says. Also in 2013, 829 rigs were running (400 of which were in the Permian Basin and West Texas region.)

The Texas Railroad Commission also receives completion reports when drilling is complete. Last year, they received 25,000, a 10,000 increase compared to 2012. In addition, 30,000 drilling permits were issued by the agency last year which was slightly down compared to 2012. Commissioner Craddick believes it's because of the amount of horizontal drilling.

"For the first time in September of 2013, horizontal matches vertical drilling," Craddick says. "That means we're issuing less permits because horizontal drilling takes in more oil."

Horizontal drilling has recently been implemented in the Permian Basin and according to vice president of Enrich Oil Corporation Allan Frizzell, is more efficient.

"We haven't really seen that type of drilling because of the geology but horizontal means digging into more space," Frizzell says.

The rapid increase in production has also made the cost of living  higher in cities such as Midland and Odessa. Craddick is well aware of the situation and hopes to keep the employees in the area. She's compared how other state agencies pay their employees and learned that in Texas, it's lower.

"We want to get more money so we can raise some salaries to be competitive with other state agencies," explains Craddick. "Who would want to stay if a first year engineer is getting paid $40,000?"

In Texas, more than 427,000 jobs were directly employed by the industry.

In the meeting, Craddick addresses fracking and how they're looking for additional advice.

"If you honestly ask me I don't think the industry is causing earthquakes," says Craddick. "We are working on hiring a seismologist for research to make us aware of things we may or may not know."

On January 1st, the agency has asked for companies to properly case and cement drilling so it doesn't contaminate the water. In order to get the best fracking results, companies need the best quality water. Craddick has asked companies to also use recycling water for alternative resource.

When asked if the Cline Shale will reach further east, Craddick says there's not a specific time.

"I dont' know if there's an absolute timing, but I know many companies are investing in it," Craddick said. "If they can figure out how it can work then it'll be great for the state."

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