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A look at Texas oil industry - its goals, its gripes

Against the night sky from a distance, oil refineries dangle from Houston's shoulders like a string of glistening pearls. Adding to the beauty of the scene, the lights are faceted and reflected back by Galveston Bay and the Gulf of Mexico.

These refineries stretch from the side-by-side Texaco and Gulf refineries in Port Arthur, past Exxon's Baytown refinery and the other ''majors'' of Texas City, to the Dow chemical complex in Freeport.

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Each ''pearl'' marks a productive refinery and thousands of steady jobs. Yet keeping these pearls polished has its costs - enough to create some resentment in Texas toward other regions that haven't made the same investment in the country's energy future.

Major oil companies have invested heavily in building up domestic supplies. Exxon, for instance, has poured over $1 million into a water injection station used to drive more oil to the surface. One longer-term solution may come from Exxon's coal liquefaction pilot plant at their Baytown refinery.

But for oilmen like Joe Wellborn, who works at Exxon's Baytown refinery, another part of the answer needs to come from the East Coast. From a Texas perspective, it is hard to understand why refineries here should import foreign oil in order to ship more than 50 percent of their products to the East Coast.

Considering the East's appetite for oil, Texans find it hard to swallow the fact that the East Coast continues to battle against offshore drilling and refineries along the sheltered shores of New England.

The oil boom started here 80 years ago with Beaumont's Spindletop gusher. The outdated iron derricks over the wells at nearby Goose Creek are visible proof that this still-producing field began pumping oil in 1908. Further discoveries in the area led to the 1919 opening of Exxon's Baytown refinery, today the largest refinery in the United States with a crude oil capacity of 640,000 barrels per day.

For the past 40 years, Mr. Wellborn has been working in the oilfields near Houston to supply the local refineries. He remembers when the rich Friendswood field was producing only eight days a month because there was no market for more oil.

Now as operations superintendent for Exxon's Baytown district, with 260 wells to look after, Wellborn is doing all he can to squeeze every last drop of oil and natural gas from the ground.

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Wellborn is proud of the Friendswood field's record: more than 500 million barrels of oil produced since pumping began here in 1937. But four years ago, Friendswood hit peak production of 70,000 barrels per day (bbls/d). Then, reflecting the downhill curve that now affects US oil production as a whole, Friendswood production began to drop sharply. It currently averages 16,000 barrels per day.

Just to maintain this 16,000 bbls/d, Exxon is constantly reworking old holes and has drilled 14 new Friendswood wells this year at an average cost of $700, 000 each. Adding to production costs, Wellborn uses elaborate gas injection techniques to squeeze more oil from the eastern section of this 4,300-acre field. In the western section, half of the 120,000 barrels of salt water pumped up with the oil every day is pumped back into the ground under pressure to enhance oil recovery.

Because the Friendswood oil has high lubricating qualities, it still is a valuable raw material for the Baytown refinery. But it no longer contributes significantly in volume terms.

As is the case with US refineries generally, dwindling returns from domestic fields such as Friendswood force the Baytown refinery to import 65 percent of its crude oil, primarily from the Middle East.

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