The state of Texas experienced peak oil production in 1972; afterward, production dwindled until the early 2000s. Production has more than doubled since January 1999, when over 39 million barrels were produced in the state. As of August 2015, 106 million barrels were produced from over 176,000 oil wells across the state of Texas. If current rates of oil production continue, 2015 will mark the highest year of oil production in the history of the United States. According to the Department of Energy (DOE), oil production in the U.S. is forecast to reach 9.3 million barrels produced per day in 2015. The contribution Texas has made to that figure is sizable. The state is expected to have produced 1.28 billion barrels of oil in 2015.

Oil and the Texas Economy

The boom has had the effect of lowering U.S. foreign imports of petroleum. A majority of the oil fields in the state of Texas originate from two formations, the Eagle Ford Shale and the Permian Basin. As of November 2015, Eagle Ford produces 2 million barrels of oil per day while Eagle Ford produces 1.3 million barrels of oil per day. The use of hydraulic fracturing, or "fracking," and horizontal drilling have infiltrated previously unreachable oil taps, supporting the surge in Texan oil production. The Eagle Ford alone accounts for 16% of total oil production in the U.S.

Counties in southeast and central Texas have benefited economically from the oil surge as employment rates, average incomes and home sales have soared in select cities, while other cities with long histories of oil production and industry seek to branch out further from recent production rates.

Multiple players in this story have gained from the new source of riches: the oil companies, the landowners who have leased their acreage to drillers in exchange for exorbitant monthly rents and the local economies of cities that play host to the fracking drama. The following are the Texan cities that have helped spur the highest oil production, driving production levels of oil in the U.S. higher than in Saudi Arabia.


As the largest city in Texas, Houston's population is 2.2 million, which makes it the fourth most-populated city in the country. Already home to the headquarters of several oil and gas companies, Houston is undergoing major developments in industrial gas complexes that are estimated at $50 billion. The complexes are being built in an effort to create more robust refinery efforts by the city since gas prices are low. Building projects are estimated to be completed by 2018. There are an estimated 150,000 extraction and field services jobs in the city. The average wage for a skilled energy worker living in Houston is $200,000 per year. Despite layoffs in the oil industry happening in Houston, the city is still the energy capital of the world. Houston is home to the second-largest public company in Texas, Phillips 66, which brought in $166 million in 2013, along with ConocoPhillips, which brought in $59 billion. The oilfield services giant Schlumberger Limited also operates out of Houston.


In Austin, the oil boom has attracted 300 companies including Jones Energy and Brigham Exploration, which employ residents in the fields of oil investment, surveying, drilling technology and production. Aiding the oil drilling ventures is access to former graduates and the research facilities housed at The University of Texas at Austin. The petroleum and geosystems engineering department has provided the educational basis for companies to be further equipped with the latest technologies upon entering the field. As part of a fellowship program, oil company Statoil ASA worked with the university to begin a $5 million investment in the school's graduate students.


The headquarters for Energy Transfer Equity is located in Dallas. The company took in an estimated $48 billion in 2013. The HollyFrontier Corporation is also located in Dallas, with revenues of $20 billion in 2013. Oil production helped move this city away from the cotton and rail industries. Oil tycoon and billionaire H.L. Hunt lived in Dallas and left a long legacy in the city.

San Antonio

As the second most-populated city in Texas and the seventh in the U.S., San Antonio is home to the South Texas Oilfield Expo and a host of oil companies including Valero Energy Corporation, which had an estimated revenue of $137 billion in 2013. Other oil companies in the state include Tesoro Corporation, with revenue of $39 billion, and CST Brands, with revenue of $10 billion. There are over 80 gas and oil companies located in San Antonio. One of the city's largest employers is an oil refinery, Ultramar Diamond Shamrock Corporation.


Located in Midland County, Midland has a population of 123,000 and sits on the Permian Basin. The city has experienced increases in population and average salaries since gains made from oil drilling in 2013. The new riches of Midland prompted population swells that were among the highest in the country in 2013, and 5,200 jobs were added between 2012 and 2013, the second-highest in the country. The city has experienced an overall population increase of 30% since 2000. Midland’s school district was able to open 135 new teaching positions, though some teachers have left their jobs to pursue higher-paying opportunities in the oil fields, where even inexperienced workers have an opportunity to net over $70,000. Average wages have increased throughout the city as entry-level fast-food service workers make $15 per hour.

Midland has the lowest rate of unemployment in the county at 2.3% as of 2014. Likewise, the cost of hotel stays has risen, along with the median household income, from $39,000 in 2000 to $69,000 in 2013. The city of Midland brought in over $40 million from sales taxes between 2014 and 2015, and another $35 million in ad valorem taxes from ProPetro Services and Basic Energy Services, the number one and two top taxpayers in the city, respectively. Of the top 10 employers in the city of Midland, four fall into the category of oil and gas.