It moves trains, planes and automobiles across the country and provides a reliable source of domestic energy in a world where war and political instability threaten imported supplies.

Oil produced by Texas companies and natural gas from Texas wells keeps the economy moving and provides reliable energy supplies that are more affordable than imported supplies, says Bill Day, an executive with San Antonio-based Valero Energy.

“At a time when people are talking about high gasoline prices and areas of the world that are troubled by war and instability, it’s important to use our domestic resources,” he says.

To meet the country’s thirst for energy, many oil companies are increasing production of Texas crude oil. The state’s reserves represent almost a quarter of the U.S. total. The state’s natural gas reserves account for almost one-third of the country’s total domestic supply.

Refineries Meet Demand

The state’s refining employers include many household names, such as CITGO, BP, ExxonMobil, ConocoPhillips, Marathon, Shell, Tesoro and Western Refining. Texas’ 27 refineries already process more than 4.7 million barrels of oil per day, accounting for more than a quarter of the country’s total capacity, and the amount is growing.

Valero, for example, is expanding the capacity of its McKee Refinery by 25,000 barrels per day. It will soon be producing 195,000 barrels of transportation fuels per day for the Texas market. That will help keep the price of gasoline and diesel fuel within reach for consumers, since oil produced and refined in Texas is $10 to $12 dollars per barrel cheaper than oil shipped across the ocean in tankers.

“That’s good news for Texas producers and Texas consumers,” says Day.

The company expanded its Panhandle Crude Gathering System and constructed new pumping stations to bring more locally produced crude oil to the McKee facility. It also is expanding its Port Arthur refinery.

“These expansion plans will enable Valero to capitalize on the production of West Texas and locally produced crudes. The McKee refinery will have more flexibility and more options, and that benefits Valero as well as the surrounding area,” says Joe Gorder, the company’s executive vice president and chief commercial officer.

Oil Builds National Security, Prosperity

Texas has developed major clusters of energy production and innovation. Houston alone has more than 3,000 energy-related companies, including two energy companies that are among 10 largest companies by revenue on the 2010 Fortune 500.

Around the state's vast energy industry has grown a major cluster in plastics and chemicals. Some 200 chemical plants operate in the state, manufacturing 14 percent of the nation’s value chemical output. Major Texas chemical producing employers include Celanese, Chevron Philips Chemical, ExxonMobil Chemical, Dow Chemical, Huntsman, Lyondell Chemical, and Shell Chemical.

The Gulf Coast's petrochemical complex is the world's largest, home to more than 400 chemical plants that employ approximately 37,000 Texans. Houston alone accounts for nearly 40 percent of the nation’s base petrochemical capacity.

A reliable energy supply is crucial for the country’s security and prosperity, says Paul Foster, CEO of Western Refining. The company is based in El Paso, where it operates a refinery. The company operates another refinery in New Mexico as well as 150 convenience stores, most of which do business as Giant stores.

“Energy production and its use are at the core of the national and global economies," Foster says. "Worldwide demand for energy is rising, especially in emerging markets such as China and India. As these and other markets continue to grow, global demand for petroleum products will continue to increase. Major weather events and political uncertainty contribute to upward pressure on prices for crude oil, natural gas and other sources of energy.

“At Western Refining, we understand the importance of providing energy for people and for the businesses that we all depend upon every day. A consistent supply of fuel is critical to our national security and economic well-being. We take this job very seriously."