Why Surging Oil Production in Texas Means Higher Demand For Storage

Storage TanksAn above-ground tank project makes more sense for oil producers in Texas as the state’s production is expected to increase in June.

The Texas Oil & Gas Association said that advanced technology and more energy investments play a key role in the rising oil production, particularly in the Permian Basin. The record output eventually created more jobs for the industry.

Energy Employment

Oil employers in the Lone Star State supported more than 325,000 jobs in 2017. This figure accounted for almost 40% of nationwide employment. Jobs in the sector also pay a median salary of $128,635, compared to $55,380 for an average job in the private sector.

The industry may seek to hire more people in the near future, following the U.S. Energy Information Administration’s (EIA) report on drilling projects in the state. The Permian Basin’s output would increase to around 3.3 million barrels per day (bpd) from approximately 3.2 million bpd in May. Other oil fields such as Eagle Ford will also contribute to production with around 1.4 million bpd this month.

Better Productivity

Workers in the oil and gas extraction sector improved their hourly output due to the use of modern technology, up by 108% between 2012 and 2017. Despite some hiccups in between those years, the EIA said that nationwide production has been steady in the last 18 months to May.

A significant part of the surplus production would likely be sent overseas, as demand for U.S. crude oil becomes stronger in Asian markets. Energy companies that plan to export oil should make sure that storage tanks are designed to be compatible with Asian refineries.


If you intend to hire contractors for tank construction projects, it’s better to find those with experience in erecting and maintaining different kinds of oil storage facilities. Remember that tanks should comply with industry standards such as the API 650 or API 653 guidelines.