An Energy Boom That Could Last

For a bursting oil region like Texas, experience is an asset

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Oil and natural gas are old energy — as old as it gets. But increasingly, the technology used to extract them is cutting-edge. “Over the last 20 or 30 years, there’s been more technological leaps out of the oil and gas industry than there’s been out of Silicon Valley,” says Dale Nijoka, Ernst & Young’s global oil and gas leader.

Nowhere is that more obvious than in West Texas, where energy companies are using hydraulic fracturing and horizontal drilling on the hydrocarbon-rich shale rocks found in the surrounding Permian Basin. For all the attention paid to the Bakken in North Dakota and the rising Eagle Ford in South Texas, it’s the reliable Permian — which has already produced 29 billion barrels of oil — that has the most room to grow. “There’s more drilling activity going on in the Permian Basin today than ever before,” says Mitch Mamoulides, Midland-Delaware basin manager for Chevron North America.

Environmental concerns about fracking and water use could slow the pace of development, but analysts believe the technology could help the Permian Basin produce more than 2 million barrels of oil a day in the next four years, which would be a historic high. Some of that is geology: the bulk of the Permian’s hydrocarbons are oil, as opposed to less valued natural gas. But expertise and infrastructure play a role too. There have been commercial oil wells in the Permian since 1921, and Midland, Texas, may have more expert drillers per capita than any other city on earth. All of which means that this is a boom that could last.

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6 comments
sophar
sophar

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DragonSpawn
DragonSpawn

The author seems to have ignored some very important facts about fracking and fracked wells:

 First, fracking and horizontal drilling are not 'new' technologies.  Both have been in existence for a very long time.  So why are we all of a sudden hearing so much about these 'new' technologies?  Unfortunately it's because the old traditional ways of drilling for oil are not so successful anymore.  Oh sure, we can drill 20 or 30 thousand feet under the Gulf of Mexico, but this isn't so easy either, and can have terrible consequences, as we discovered a few years ago.  The reason we are fracking wells is because there are no new oil reservoirs that can be easily accessed with traditional drilling.  They've been all exploited and are currently being pumped at their maximums.  The reason we are fracking and the reason we are using tar sands oil, is because all easily accessible oil has been expoited.


Second, and here's the real bad news, fracked wells have an atrocious decline rate.  What does that mean?  A traditional well may decline at 3 to 5 percent per year, a fracked well declines at 40 to 60 percent after the first year.  So what's the big deal?  The big deal is that the industry has now been producing a certain amount of oil from fracked wells, but in order to maintain and grow that quantity, the industry must not only drill new wells, but also replace the oil lost to the incredible decline rates of these wells.  This is all very well known, but for some reason never included in the MSM articles on fracking.  

Third, the best is never saved for last.  The prime locations are exploited first.  While this may seem like common sense, it does not bode well for the future.  If we need to constantly be drilling new wells to replace existing wells and if the new wells are constantly underperforming the older wells, that creates quite the quandry doesn't it.  But you won't hear the industry talking about that, will you? Why?  Because it's insanely expensive to drill all the new wells, so they need lots and lots of money.  Best to keep a positive spin on fracking, wouldn't you say?


The only reason fracking exists is because we have no other options, and it is going to get very serious from here on out.  The world as you've known it has now ceased to exist.  The paradigm has shifted to a new reality, but most people are still fighting like heck to maintain the old paradigm.  It won't do a lick of good.  We placed all our eggs in the petroleum basket and that was a very bad thing to do.  One day you will realize the world has changed but by then it will most likely be too late.  If you think fracking is going to change anything, best of luck.


JohnBrown
JohnBrown

Wouldn't it be great if the entire nation was developing its energy resources providing millions of high paying jobs, that can't be outsourced, and lowering energy prices for average working Americans that have been hit so hard by the job killing, growth killing policies of Obama?  Unfortunatley, Obama continues to block the Keystone XL pipeline and all those high paying jobs, and he continues to block energy development on all Federal Lands.  Millions of jobs lost, and worse.  If we were producing more clean burning natural gas, we aren't because of Obama, we would be reducing Greenhouse gases even more.  Obama has given us the worst growth and worst UNEMPLOYMENT for the longest period of time since the great depression, and lowered the average incomes of middle class working American more than any President since the Great Depression.  No matter how you look at it Obama is a total disaster.  Thank Goodness for Texas, and the fact that they do things the Can do Texas American Way.....not Obama's sleazy corrrupt "Chicago Way"!

TanyaSimpson
TanyaSimpson

Thank you! Thank you! Thank you for your interest in developing a new improved energy source. With the power of the press and the truth what you are doing could save millions of people’s lives. It is estimated that 9 billion people will starve by 2050. In order to stop the nation from starving we need an affordable source of energy that protects the environment. .We do not have an affordable source of energy to pump the water for food,generate the electricity for schools and medical needs. I have spent 10 years on this problem and by adding one proven technology we can have a reciprocating, internal combustion engine that manufactures for a fraction of the cost of our present engines. This new engine will have an extended life span, plus it substantially reduces emissions. I am very interested in furthering the development of these ideas for a new engine. Please feel free to contact me. Sincerely,Mark D. Grover

Whatanotion
Whatanotion

@DragonSpawn So guess what Dragondude?  Remember what the Germans did with coal when they ran out of gasoline?  Right: they made gasoline from coal.  It's going to hit the newspapers like a miraculous discovery just in the nick of time.  The way fracking did here.  And then there's the lack of need to manufacture anything as we will have more hand me down cars and furniture than the productive population can use.  

JoseGonzales
JoseGonzales

@TanyaSimpson  We can easily go into an ice age this winter or next winter that will bring the 7 billion people we have now down to 4 billion.  Add disease and we could be down to 3 billion.

I am curious about the new engine.  How about setting up manufacturing in Presidio, Texas, the oldest continuously populated area in North America?  It is currently being built up to be self sufficient generating twice as much electricity it uses from solar alone.  Engine blocks could be cast using heat from the sun.

When the inevitable ice age hits, Presidio, Texas will become an oasis.