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Saudi Arabia is currently the largest oil-exporting country in the world. Last year, the Middle Eastern nation shipped 7.1 million barrels of oil per day (BPD) to global markets. That's light-years ahead of the roughly 2 million BPD the U.S. exported last year.
However, America is currently on track to ship more oil than Saudi Arabia within the next five years. Fueling that surge will be the state of Texas, which should drive the bulk of the country's oil growth through 2025.
Image source: Getty Images.
Dual growth engines
The U.S. currently produces about 12.1 million BPD, according to the U.S. Energy Information Administration. That has the nation's oil industry on track for another record-smashing year. Several states supply this output, including California, Alaska, North Dakota, and Texas.
However, Texas is by far the biggest contributor, thanks to the presence of the Permian Basin and Eagle Ford Shale. Those two regions currently produce a combined 5 million BPD. While some of that output comes from the New Mexico side of the Permian, Texas is on track to pump more oil this year than any country besides Russia and Saudi Arabia.
Texas has more oil on the way. The Eagle Ford, which currently pumps out nearly 1.2 million BPD, should top 2.2 million BPD by 2025 -- a more than 92% increase -- according to a forecast from midstream giant Enterprise Products Partners (NYSE: EPD). The Permian, meanwhile, should see its oil output increase from its current rate of more than 3.8 million BPD up to nearly 8 million BPD by 2025, for more than a 107% increase. For comparison's sake, oil output in the Rockies, which has both North Dakota's Bakken Shale and Wyoming's Powder River Basin, is only on track to increase about 8% over that time frame to roughly 2.6 million BPD, according to Enterprise Products' forecast.
Image source: Getty Images.
A building boom of epic proportions
That anticipated gusher of oil production growth in Texas has the industry planning to spend billions of dollars on building out the necessary infrastructure to move more barrels to global markets. Enterprise Products Partners is one of several companies working on oil pipelines in the region. The company is currently in the middle of converting an existing natural gas liquids line to oil service, which will help move additional Permian barrels toward the coast. Meanwhile, Canadian oil pipeline giant Enbridge (NYSE: ENB) is working with MLP Phillips 66 Partners (NYSE: PSXP) and refiner Marathon Petroleum (NYSE: MPC) to build the Gray Oak pipeline. That roughly $2 billion-system will move 900,000 BPD of crude from both the Permian as well as the Eagle Ford to refineries and export facilities along the coast of Texas.