Oil industry in Texas poised for another resurgence?
In the heart of the Lone Star State, the energy industry is gearing up for an "incredible boom cycle," predicts Phil Flynn, senior market analyst at the Price Futures Group. This optimistic outlook stems from the current supportive political environment, which Flynn believes is a significant factor in the improvement of the industry's fundamentals.
According to Flynn, the energy industry in Texas has been hampered by "crazy regulations" in the past, leading to a pullback. However, under the Trump administration (2017-2021), the Texas oil and gas industry benefited from strong political support and significant deregulation, contributing to accelerated growth and production increases.
By 2025, Texas oil production has reached record highs, with crude oil output climbing to 5.77 million barrels per day in April and natural gas production hitting a record 37 billion cubic feet per day. This robust output growth is driven by technological and operational efficiencies rather than labor expansion, as employment in upstream Texas oil and gas saw a slight decline in June 2025 by 2,700 positions.
The Trump administration’s hallmark policy moves, such as the passage of the "One Big Beautiful Bill" (OBBB), continue to impact the industry by streamlining permitting processes, restoring certainty to LNG export approvals, mandating federal lease sales, and delaying methane fees until 2035. These policies effectively reduce regulatory hurdles and maintain favorable tax treatments, creating a more business-friendly environment that supports growth and investment.
Looking ahead, Texas is positioning itself as a leader in emerging sectors like carbon capture and storage (CCS). The EPA granting Texas Class VI primacy, which would enable regulatory control over CCS wells, promises to unlock new economic sectors, attract trillions of dollars in investment, and create jobs, reinforcing Texas’s energy leadership.
However, Flynn's prediction for the energy industry in Texas is not a guarantee of its future performance. The industry, like any other, is subject to the ups and downs that have characterized it for over a century. Flynn himself acknowledges this, likening the current state of the industry to "the best of times; the worst of times."
It's worth noting that approximately 30% of the economy of Houston, the energy capital of the world, is supported by the oil and gas industry. The industry's fortunes are closely tied to the city's, making the current positive outlook a welcome relief for many.
In conclusion, the Trump administration’s political support and deregulation have contributed to a strong growth phase in Texas’s oil and gas industry, bolstering production and easing regulatory barriers. By 2025, the industry continues to thrive on these foundations but is increasingly focused on sustainable, efficient operations and new technologies, alongside expanding into new areas such as carbon storage, to maintain Texas’s leadership role in energy production.
- The strong political support and deregulation under the Trump administration from 2017 to 2021 significantly impacted the finance of the Texas oil and gas industry by contributing to accelerated growth and production increases.
- Despite the current positive outlook in the energy industry in Texas, it is still subject to the ups and downs characteristic of the industry and is potentially vulnerable to fluctuations in the general news and politics.
- With the EPA granting Texas Class VI primacy, the energy industry in Texas is aiming to leverage new technologies like carbon capture and storage (CCS) to expand into emerging sectors, attracting investments and creating jobs, which could impact the overall energy, finance, and politics landscape of the region.
