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Texas does it again.
When the late Larry Hagman first appeared as J.R. Ewing in the TV series Dallas in 1978, the image of the swaggering, hard-drinking, woman-chasing, big-money, large-living Texas oilman was firmly fixed in the national imagination. With the discovery of the East Texas Oil Field in 1930 and development of the Permian Basin of West Texas during World War II, massive petro-wealth began to flow and the Lone Star State and oil became synonymous.
But as of J.R. Ewing’s debut, oil production in Texas had already hit its peak. From the high-water mark of nearly 3.5 million barrels average per day in 1972, oil production in Texas fell steadily, to less than a million barrels average per day in 2002.
But, according to a report produced by the American Enterprise Institute, that trend has been reversed – sharply. In just two and half years since 2011, Texas oil production has doubled to a rate of 2.45 million barrels per day – a pace not seen since 1981. At the current rate of growth, Texas is on track to produce more oil than it did in the peak years of the 1970s. Texas today accounts for one of every three barrels of oil produced in the United States. If Texas were a separate nation, it would be the 12th largest oil producing nation in the world, only slightly behind Venezuela and Kuwait.
So what happened? Short answer: capitalism. Entrepreneurs — and not the government — developed breakthrough drilling and recovery technologies that have turned oil fields that were once either physically or economically out of reach into massive fields of proven, recoverable reserves. Jobs and economic growth have followed.
Compare this success to the failures of the energy policies of the Obama administration. The president promised millions of jobs in a 21st century “green energy” future, only to pour billions of taxpayer dollars into bankrupt rat holes like Solyndra. So-called “green energy” alternatives are not economically viable even with massive infusions of federal cash. The American oil & gas industry, meanwhile, continues to employ capital that is freely made available by risk-taking entrepreneurs and investors to the good effect of expanding the country’s domestic energy supply.
This has happened in Texas, which makes me quite proud. But it’s bigger even than Texas. It’s an American success story.
At one time in the United States, success such as this would have been hailed by the nation’s leaders as yet another example of what makes the country great. But not this time. The success of the American oil & gas industry, obtained despite the federal government standing in the way at every turn, is vilified and demonized. The profits enjoyed by those that invest capital in one of the riskiest of all industries are looked upon by those leading our government as ill-gotten and thus ripe for the taking.
Yet undaunted, the American oil & gas industry triumphs. In the quest to meet the energy needs of the world’s largest economy, American entrepreneurism succeeds while big-government central planning falls flat.
It happens so often that I keep thinking that one of these days acolytes of big government will open their eyes and finally see the world as it really is — a place where big government smothers economic opportunity and where capitalism sets it free.