Pipeline capacity has created major roadblocks for America’s biggest oilfield, known as the Permian Basin, but Texas Railroad Commissioner Ryan Sitton said the issue could be solved within the next year or two.
“The industry is building new pipelines right now to carry all of that new oil and natural gas from the Permian Basin all across the country to the refineries along the Gulf Coast and around the world,” he told FOX Business’ Stuart Varney on “Varney & Co.” on Tuesday.
“They are getting that product to the Gulf Coast where it can export oil and natural gas to places like Europe, China.”
The Permian Basin is one of the biggest reservoirs of oil in the world and is located in the western part of Texas and southeast New Mexico. According to Sitton, it contains as much as 1 trillion barrels of oil.
Until the new pipeline capacity is completed, some crude oil producers will have to deal with output restrictions, he said.
“In the next 12 to 24 months most of the new capacity that the industry needs will come online,” he said. “But still when you talk about a 6-to-18-month window where there isn’t enough capacity, that’s a big shock to that system.