Natural gas now rules the oil patch in Texas, thanks to rising prices. Long viewed as the “oil patch,” a new study by the Texas Alliance of Energy Producers found that the dollar value of state gas production is actually three times as large as that of crude.

Prices and drilling statistics are surveyed for an index produced by the Alliance and the Wells Fargo Energy Group, which measures the health of the Texas energy industry.

The Alliance conducted its first survey in 1995, and at that time, gas and crude were nearly equal in value. However, crude production has declined since then while gas prices have continued to rise.

The value of natural gas to Texas producers rose 58.9% in 2003 to $28.6 billion, while the value of crude oil sold grew 18.8% to $9.98 billion, according to the study.

The price of natural gas rose 63% last year, while crude was up 21.8%, the Alliance said. The authors found that what magnified the differences is that the oil output has dropped by nearly one-third since 1995.

In 2003, 6,336 gas wells were completed in Texas, which was approximately double the 3,111 oil wells completed in 2002. Natural gas output has been declining, the study noted, but at a slower pace than oil, which has been “going down significantly year after year.”

While the natural gas gains were significant, the Alliance noted that employment in the oil and gas business failed to show impressive gains. Exploration and production employment in Texas declined by 0.6% in 2003, while oil-field service company employment declined 2.3%.

The Alliance noted that there may not be enough qualified workers to hire, and there has been more consolidation in exploration and production. However, there were 12,664 drilling permits issued in Texas last year, which was 30.3% higher than in 2002.

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