Texas oil industry boasts of near-infinite supply — but what if the world stops buying?

Wind farms like this one in the Fort Stockton area help give Texas the highest wind power capacity in the nation. Matching the intermittent wind supply with demand can be tricky. Wind farms like this one in the Fort Stockton area help give Texas the highest wind power capacity in the nation. Matching the intermittent wind supply with demand can be tricky. Photo: Michael Paulsen, Staff Photo: Michael Paulsen, Staff Image 1 of / 12 Caption Close Texas oil industry boasts of near-infinite supply — but what if the world stops buying? 1 / 12 Back to Gallery

With all the talk from Trump administration officials about achieving "energy dominance," Texas' own oil and gas industry has set out to prove that it's the most dominant of all.

In a chest-puffing report issued Thursday, the Texas Oil and Gas Association detailed the billions of dollars of investment that are going into drilling, pipelines, and refining capacity in and around the bountiful Permian Basin. Texas accounts for 45 percent of onshore oil production and 25 percent of natural gas, and IHS expects investment in the Permian to quadruple by 2021, to $40 billion.

"What this report reflects is that Texas is the global energy leader, and we are very proud of that fact," said Todd Staples, TXOGA's president.

Impressive numbers, to be sure, especially when business investment in the rest of the American economy has been lagging. But even with a president in the White House and a governor in Austin willing to do seemingly whatever the extractive industries want, there may be another challenge stalking Texas' fossil fuel producers.

That challenge is laid out in another report issued recently by BP, in the 66th edition of its annual statistical review and world energy outlook. It found that global energy demand increased by only one percent in 2016 for the third year in a row, a marked decrease from the longer-run average of nearly two percent.

That decline was led by a dramatic slowdown in energy demand growth in China, which is shifting to less energy-intensive industries to power its economy, as well as appliances and cars that need less electricity and fuel.

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"The world has never gotten more efficient faster than its getting right now," says BP's general manager of global energy markets, Mark Finley. All of that demand growth was in the power sector rather than fuels for things like transportation, and 30 percent of the production growth came from renewable sources.

Even as fast-growing nations like India move towards a higher standard of living and all the power-using amenities that requires, they may be able to leapfrog the most polluting stages of that transition, if electric cars and solar power become cheap enough. That would depress energy demand growth even further.

TXOGA's report contains a snide reference to the idea, since disproven by advances in drilling technology, that the world would soon run out of fossil fuels. "The findings of this paper strip bare arguments from oil and natural gas critics who, at first, inaccurately pushed a 'peak oil' theory that was to have been the downfall of American energy development," it reads.

The theory of "peak demand," now being advanced by some of the world's more progressive energy companies, seems like a tougher one to disprove.

"As we know from history, one set of challenges is likely to be replaced by another," wrote BP chief executive Bob Dudley, "as we learn to operate in ever-changing markets and to harness the opportunities afforded by the transition to a lower carbon environment."

Of course, Texas could still enjoy "energy dominance" from a renewable energy perspective as well, with the most installed wind capacity in the country — a source that often competes on cost even with natural gas.

But that's not what TXOGA is talking about. "Fossil fuels are the only affordable and reliable source to meet our energy needs for the foreseeable future," the organization said in a statement.