Historically, humans have been utilizing oil in various forms since before what we now recognize as the common era. From Mesopotamians and ancient Egyptians using crude oil as an adhesive to ancient Chinese civilizations using oil for heating and lighting purposes [1-3], mankind has evolved greatly to use oil in its many forms for many purposes. In the middle of the nineteenth century in 1859, inventor Edwin Drake in Pennsylvania was the first to invent an oil drill that could dig deeper than any of its previous iterations, making the state of Pennsylvania a hub for oil production until the turn of the twentieth century [4].

The Texas oil boom started in Beaumont, Texas in January of 1901, where in the Spindletop oil field, the Lucas No. 1 oil drill exploded and sprayed oil for nine days [5]. With their sights set on a new money maker for the state, Texas expanded its resources to accommodate the oil boom [6]. Over one hundred years later, the state has still reaped the benefits of this oil boom, as Texas remains the largest oil producer in the world. 

Geography & Geology of Oil in Texas

Texas is one of the most crucial players in national and international oil production because of the amount of oil that is available in the state. This availability comes from the amount of oil fields available across the state through its various sandstone reservoirs and shale formations [13]. Petroleum typically occurs within sedimentary rocks that are very porous, making sandstone and shale formations integral to the oil industry itself [7,8].

In West Texas, the Permian Basin is the largest oil producing region in the state of Texas and is internationally significant in its oil production as well. This area is 300 miles long with over seven thousand fields, including formations like the Yates, Avalon, Canyon, and San Andres, alongside many more. Due to the amount of oil that is produced throughout the Permian Basin, the area produces a little under half of the United States’ entire oil production [9].

The Eagle Ford Shale spans diagonally across the state of Texas, from around the Houston area in East Texas down to the Texas-Mexico border. Compared to other shale formations, the Eagle Ford Shale experiences very high oil production, which makes it another crucial producer within the state [10]. While much smaller in comparison to its formerly listed counterparts, the East Texas Oil Field, named after the geography of where it was founded, is one of Texas’s most abundant oil producers. The East Texas Oil Field is a sandstone formation and is the area in which the 1930 Texas oil boom began, causing the governor at the time to step in to regulate oil drilling in the area through using the Texas National Guard [11,12].

Total oil production in Permian Basin, Eagle Ford Shale, & East Texas Oil Field regions, as of June 2024] [SOURCES: 37/38/39]

Current State of Affairs

For many years, the state of Texas has remained at the top of the United States’ domestic oil producers. For example, in 2022 as well as 2023, the state accounted for almost half of the United States’ crude oil production. As of 2024, Texas remains at the top as one of the United States’ energy producers, providing for about twenty-five percent of the nation’s primary energy. That number includes more than just oil, but natural gas and wind-powered electricity as well [14].

As years have gone on, numbers pertaining to Texas’ oil production have varied; however, as of August 2024, the state’s production seem to have been steadily on the rise since 2021 and was predicted to continue to rise into October 2024 [15]. Due to this steady rise of oil production, Texas reached and maintained record heights in their oil production and exports. 

Texas energy consumption estimates by energy type, 2021 (in trillions of Btu)] [SOURCE: 40]

Key Players of the Industry

There are many key players in the Texas oil industry. According to the Railroad Commission of Texas in 2021, Pioneer Natural Resources ranked first in its oil volume, with over 170,000,000 barrels of crude oil listed. Pioneer Natural Resources was then followed by Diamondback Energy at over 90,000,000 barrels produced, EOG Resources at over 81,000,000, and XTO Energy at over 67,000,000 [16].

These four are major players in the industry and have had many decades worth of influence over the Texas oil production industry [17]. Pioneer Natural Resources, for example, has been active since February of 1997, with over 1,500,000,000 barrels of oil produced in that time. Diamondback Energy, EOG Resources, and XTO Energy have all also been around for a long time as well. EOG Resources has been around since the end of the 1970s and is still going strong to this day as a major site of oil production in Texas with almost 2,500,000,000 barrels of oil produced in its lifetime. XTO Energy is even older than either EOG Resources or Pioneer Natural Resources, producing over 1,300,000,000 barrels of oil since they were founded in the mid-1960s. While Diamondback Energy has only been around since 2011, they have still produced over six million barrels of oil.

With ongoing efforts to contribute to a sustainable future, these key players are also making efforts to push for that future in their work. In their 2023 sustainability report, Pioneer Natural Resources have planned for several scenarios that are mindful of future climate change scenarios and other developments [32]. Diamondback Energy has also done various measurable efforts towards a sustainable future, such as making efforts to use recycled sources for their water supply as well as creating plans that allow for the restoration and preservation of habitats impacted by their work [33]. EOG Resources have made similar efforts, in both preservation efforts as well as joining the Oil and Gas Methane Partnership 2.0 to accurately report their methane gas transmissions during options [34].

Employment Opportunities and other Economic Benefits

In 2021, it was reported that over 600,000 jobs within the energy industry, including oil and natural gas, were available in Texas [41]. According to the Texas Workforce Commission, many of these jobs pay some of the highest wages in Texas, with an average salary of $124,000 being paid in 2023 [44].

With so many jobs being created via this industry, as well as how Texas’ various sandstone and shale formations are spread across the state, local and statewide economics and essential resources reap many benefits. Because of the tax revenue offered by its oil and energy production, the state of Texas reached the highest total of tax revenue in 2023, reaching a total of $26.3 billion [42]. This revenue was then spread across the various services that help Texans; for example, most of the tax revenue Texas made in 2023 was used to fund public education in the state [42]. Funds are also allocated to the Rainy Day Fund, which has accumulated over thirty-one billion dollars since the fund’s inception in 1987 [42]. Other benefits include many companies within Texas’ oil industry contributing to the local communities they work in, such as donating to local charities and volunteering [43]. 

Prices, Shortages, and Transport of Oil

As opposed to the amount of oil produced, the price of oil per barrel varies more wildly depending on various aspects, such as the supply and demand of oil, market participants like hedgers and speculators, as well as market sentiment [21]. As of December 2024, the current price of Texas oil sits at around seventy dollars per barrel of oil [19/20].

On the topic of supply and demand, more specifically, another factor that has major impact on the price of oil are shortages. Oil shortages have a lot of causes, but natural disasters as well as sociopolitical tensions have a heavy-handed impact like no other on Texas oil production and oil prices. The COVID-19 pandemic and consequential quarantine had a major impact on oil production, thus having a major impact on the price of oil as well [25]. In 2021, the year following the quarantine, Texas went through a major freeze, which effected national oil markets [22]. Since the freeze infamously killed the Texas power grid, oil production suddenly dropped by over four million barrels a day; that number accounts for almost forty percent of the entirety of the United States’ domestic oil production. However, in 2022, with the ongoing war Russia has waged against Ukraine, the United States government decided to boycott Russian oil and gas imports [24]. Because of this boycott, domestic demand for oil and gas rose, meaning that the state of Texas now had a surplus of its production in comparison to the years before. 

Besides prices and shortages, transportation is also important to Texas and its oil production. There are many businesses dedicated to transporting oil in the state of Texas, from privately owned businesses like Mission Petroleum Carriers [26] to family-owned business like PennCo Transport [27]. These businesses, as well as many others, all specialize in transporting Texas oil throughout the state. 

Ecology & Future Prospects

With as hugely vital Texas oil production is to the United States economy, a major concern in the modern era is the ecological impact of oil production. While the Railroad Commission has majority jurisdiction over how oil production in Texas is regulated, the Texas Commission on Environmental Quality (TCEQ) and similar services like Texas Oil Environmental are dedicated to regulating the ecological impact of Texas’ oil production [28/29]. These organizations focus on aspects such as managing oil waste, which can negatively impact water or air quality if it is improperly disposed of. However, such efforts do not hide the fact that the oil industry in Texas has a long road ahead before it can truly become ecologically stable. In January 2024, a report from the Natural Resources Defense Council documented that almost sixty federal and state subsidies worth billions of dollars incentivized extraction from the Permian Basin in Texas as well as New Mexico [35]. This incentivization is dangerous from an ecological perspective, as overextraction of oil increases air pollution and derails ongoing efforts to fight against climate change. 

Texas has been at the top of the nation’s and globe’s oil production for a very long time, and as of right now, prospects are still looking very good for the state. Even with previous years of wildly varying production, oil production has been reaching record highs since 2023 and continue to rise as we reach the end of 2024. Technological advances and innovation due to drilling analytics work in Texas’ favor to adapt to new challenges put onto the state’s oil production, and despite changing rules, nothing will stop the Lone Star state in keeping its spot up top [30/31].

Conclusion

The state of Texas is a major oil producer of not only the United States of America, but countries around the globe as well. This is not a surprise by any means, as the geography and geology of Texas offers many ways for the state to produce billions of barrels of oil across the entirety of the state. Despite the changes in oil’s price, as well as shortages caused by outside effects, the state of Texas continues to adapt and innovate its oil production in a way that accounts for its ecological impact as well as keeping the state as one of the top oil producers in the world.

Keywords: oil, Texas, future, geography, prices, shortage, transport, history, geology, ecology