Texas drilling rigThere was a time, not all that long ago, when the Texas economy moved up and down with the rig count (the number of rotary oil and gas drilling rigs) in the state. No more. Now the vast majority of Texans would be much happier with oil at $10 per barrel than $60. Given the overall decline in production a buzzing rig count has only a marginal impact on the state's overall economy. Still, lots of drilling does mean tax dollars and economic boom times for many parts of Texas - and in the long run it will mean lower gas prices as new supplies come on line.
Last month the drills were indeed buzzing. There are currently 669 operating drilling rigs in Texas (according to Hughes Tool). That is up from 562 only nine months ago. And it is up from the all-time low point for Texas which was 186 in April 1999 but a long way from the all-time high of 1445 in August 1981. There is every indication the count is headed much higher. According to the Texas Railroad Commission there were 1222 drilling permits issued in the state last month. The last time permits were than high was 1986.
As of today there are a little over 72,000 active gas wells in the state and 44 billion cubic feet of proven gas reserves. That is the highest number of active wells ever but the high point of proven reserves came in 1968 when reserves topped 125 billion cubic feet. Producing oil wells in Texas peaked at 210,000 in 1985 and today stand at 151,000. Crude oil reserves in the state have toppled from a high of around 114 million barrels to only about 4 million barrels today. Given the rapidly increased rate of exploration these figures will likely begin to move up again as new technologies enable the capture of reserves from locations previously too difficult or uneconomic to reach.