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Oil & gas pipelines in Texas

The Permian Basin and Texas Oil & Gas History

Oil is so essential to modern life - everything from its largest use in transportation, to the most minute convenience such as a plastic toothbrush handle which requires petroleum in its production.

Oil was originally formed millions of years ago by heat and pressure deep within the earth forcing deposits of organic animal and plant matter into cracks and crevices within layers (strata) of rock. Oil explorations over the past century have focused on finding 'oily' rocks just beneath the earth's surface - sometimes breaking through several layers of solid rock in order to get at a pool of oil below. Oil is also found trapped in shale (very fine-grained sedimentary rock) or sandstone (a porous type of sand). Oil was often originally formed near the surface (less pressure). However, after having seeped up towards the surface pressure changes cause many gases to bubble out with the oil which releases energy equivalent to around 1/3 gallons per barrel; this boiled-off gas can be re-captured and used for energy needs. Oil seeps naturally up to the surface where pressure is minimal.

The Permian Basin

Oil & gas are not new to Texas. Oil production began near present-day Houston in 1866 and boomed as the "black gold" was used to power ships, trains, and industrial machinery. Although Texas oil production peaked in 1972, oil & gas still account for over one-third of the nation's crude oil production.

Texas established Permian Basin as one of the state's top oil & gas producing regions by 1935. That year, Permian Basin accounted for about 25% of Texas' crude oil output while also ranking second in natural gas production after East Texas. The Permian Basin was so productive during this time period that it once produced more than half of America's black gold during World War II, while simultaneously supplying Texas with around one-third of its oil output.

The Permian Basin is considered by some as the best place on Earth where oil can be found as it is vast with deep deposits down as far as 10,000 feet below ground. Since the Permian Basin has been hailed as one of the top oil & gas producing regions in North America, it's no surprise that Texas is closely tied to its rich history. Permian Basin encompasses West Texas and southeastern New Mexico; its name comes from the Permian Period of geologic time, which occurred about 250 million years ago during the Paleozoic Era.

The Importance of Oil & Gas in Texas

Oil & gas have been important to the Texas economy ever since oil was first discovered at Oil Creek in Titusville, Pennsylvania, on August 27, 1859. But oil & gas are still extremely significant to today's economic landscape. Oil is exported all over the world and accounts for close to half of the revenue brought into Texas State coffers. In addition, here are some other great facts about oil & gas in Texas:

The Future of Oil & Gas

With oil prices recovering after dips during COVID, it's clear that oil companies will continue searching for and extracting more oil than ever before. Oil prices run like a roller-coaster, and the recent recovery helped boost oil companies' profits which can lead to greater investment in oil extraction activities. Oil companies are always looking for new sources of oil but none may be as abundant with oil as the Permian Basin with an estimated 19 billion barrels left.

Texas oil production peaked in 1972 with almost 3 million barrels per day but by 2012 it had dropped to just over 1 million barrels per day. Drilling activity has increased since 2008 and is expected to continue for decades more due primarily to advances in technology which make it possible to drill deeper faster and at lower costs than ever.

If you have oil & gas questions, please do not hesitate to call us at (432) 284-4411 to speak with our attorneys. We offer free consultations, and we’re looking forward to hearing from you.