Just in time for the holidays, state Comptroller Susan Combs released a report detailing the impressive state budget.
The report says Texas is projected to end its 2014-2015 biennium with an unexpected surplus of more than $2.6 billion, due largely to payments from the Texas oil and natural gas industry being $2 billion more than anticipated.
The comptroller reported that Texas has not only completely recovered from the jobs lost during the recent recession; it has added 597,000 jobs beyond the previous peak in August 2008.
In contrast, she noted, the rest of the U. S. is still at an employment level 1.5 million people lower than that immediately prior to the onset of the recession six years ago.
What does this mean for Texas? For one thing, it is great news for the state’s Economic Stabilization Fund, better known as the rainy-day fund, which is almost entirely funded by Texas’ oil and natural gas severance tax.
Due to the higher projected revenues from oil and natural gas, the rainy-day fund will be completely replenished despite Texas voters having agreed to use $2 billion for the State Water Plan and, assuming voter approval next November, another almost $1 billion for transportation projects.
Based on the comptroller’s projections, a balance in the rainy-day fund of at least $8 billion will greet the 2015 Legislature.
Implicit in the comptroller’s statements is the recognition that the State of Texas is cashing in on the shale gas and oil revolution. Texas is blessed with more natural gas and oil shales than any other state.
These shales, most notably the Barnett Shale, the Eagle Ford Shale and the multiple shales in the Permian Basin, coupled with the technologies that have made it possible to extract natural gas and oil from them, have made Texas the leading energy producing state in the U.S.
Texas is now producing 25 percent of the nation’s natural gas consumption and 2.7 million barrels per day of crude oil. If Texas were a country, it would be the 15th-largest producer of oil and natural gas in the world.
With Texas’ large contribution, the United States has overtaken Saudi Arabia and Russia to become the world’s biggest oil producer.
It was the development of the Barnett Shale that turned around decades of declining oil and natural gas production in Texas, beginning in 2006.
Residents of the Barnett Shale area should be proud that the shale energy revolution, now in full swing in 26 states and numerous country around the world, began right here in North Texas.
Texas oilman George Mitchell, who recently passed away, started it all when he decided in 1981 that he was going to find the key to getting the Barnett Shale to release its natural gas.
After 20 years of experimenting with a natural gas well in southwestern Wise County, he perfected the type of hydraulic fracturing that worked best in the Barnett Shale and later combined it with horizontal drilling.
Others followed suit and the development of the Barnett Shale took off like a rocket in 2002, with other shales being developed soon thereafter.
The combination of horizontal drilling and hydraulic fracturing has been adapted to shale deposits that contain crude oil, and now more than 50 shale deposits are being developed in the U.S.
The result has been continuing good news for the last 10 years, including huge positive economic impacts, increased domestic energy production that could make the U. S. energy independent in the next few years, and decreased carbon dioxide emissions as natural gas replaces coal in the generation of electricity.
The latest good news is that the shale revolution has given Texas the healthiest state budget in the country.
This holiday season is a good time to be thankful for Texas’ vast energy resources and the Texas oil and natural gas industry that is developing them, giving Texans the gift that will keep on giving for decades to come.