Permian Basin of West Texas seeing oil boom

DALLAS — The Permian Basin of West Texas is experiencing an oil boom, leading some of the region’s top oilmen to predict that Texas oil production will double within five to seven years.

Oil drillers over the last eight years have found that the dense oil rock of the basin surrounding Midland and Odessa responds well to hydraulic fracturing, releasing lush yields. Total oil production last year in Texas averaged more than 1 million barrels per day for the first time since 2001.

“Right in the basin, we could get up to 2 million barrels a day,” Jim Henry of Midland-based Henry Resources told The Dallas Morning News for an article in its Sunday’s edition.

“I’ve been totally surprised by the amount of oil we’re finding out in the shale zones,” Scott Sheffield, chairman and chief executive of Irving-based Pioneer Natural Resources Co., told the newspaper.

“We have 30 billion barrels of new oil discoveries,” said Tim Leach, chairman and CEO of Midland-based Concho Resources. “It can be hard to get your mind around that.

The cloud on the horizon is the persistent drought that has gripped the region. Hydraulic fracturing, or “fracking,” requires massive amounts of water to pump into the ground under high pressure.

Drillers also worry about the prospect of tax increases and limits placed on land use by the presence of such endangered species as the dunes sagebrush lizard.

But as long as crude oil prices remain high, around $100 per barrel, drilling will remain profitable.

Similar booms are under way in the Eagle Ford Shale of South Texas and the Bakken Shale of North Dakota and Montana. Production also is climbing rapidly in western Alberta Canada, which is now the largest source of U.S. oil imports.

“I could paint a scenario for you where we are producing 3 million more barrels per day by 2016, which would almost get us to the point where we could eliminate 60 to 70 percent of our OPEC imports,” Texas Railroad Commissioner Barry Smitherman told The News. “With that greater control over our own energy security, we could care less about what happens in the Strait of Hormuz.”

The narrow straight between the United Arab Emirates and Iran is considered strategically vulnerable to blockade by Iran’s revolutionary regime.

The United States still imports 45 percent of the 19 million barrels of petroleum that it consumes, but that is a sharp reduction, according to the U.S. Energy Information Administration. In 2005, about two-thirds of all liquid fuels the United States consumed was imported.

15 Comments

  1. GDI

    “We have 30 billion barrels of new oil discoveries,” said Tim Leach.

    That announcement will send the price of oilup at least $5 per barrel.

    #1
  2. Hotpuppy

    A good first step would be to sharply tax the export of liquid fuels such as gasoline and diesel. Exceptions to this should be made for Mexico and our Central American / Caribbean neighbors. However, shenanigans like subsidizing diesel production while shipping it to Europe have to stop.

    #2
  3. txloanguy

    On PRIVATE land. Public land production is down. Obama thinks he can take credit for increased production after he virtually killed offshore drilling. I hope we survive the Obama Agenda.

    #3
  4. Hal

    Who in the AP finally woke up to what anyone in the oil indusrty has known for years. This information is so old in isn’t news anymore

    #4
  5. TexasSpartan

    Well, I guess this blows away the claim so many make that President Obama has shut down oil production in this country.

    #5
  6. westtex

    That picture is a bit misleading and dated. When a well comes online it DOES NOT look like that; gushing everywhere.
    -
    We are VERY careful not to pollute!
    -
    Other than that, the Permian Basin is the place to be if you need a good paying job!

    #6
  7. Burrito-boy

    Quote; {“I could paint a scenario for you where we are producing 3 million more barrels per day by 2016, which would almost get us to the point where we could eliminate 60 to 70 percent of our OPEC imports,” Texas Railroad Commissioner Barry Smitherman told The News. “With that greater control over our own energy security, we could care less about what happens in the Strait of Hormuz.”}

    Could Mr. Smitherman also paint a scenario of the US economy supporting the continued expansion of the current “Boom”??

    Would Mr. Smitherman use “Oil based” or “Water based” paint??

    #7
  8. Chuck

    Burrito-boy,

    The polymers and monomers that go into latex and acrylic (water-based) paints come from petroleum. With no crude oil and natural gas, almost every product used by modern man wouldn’t be available.
    Without the chemicals developed and used from oil and gas, our entire existence would revolve around wood, leather, natural plant and animal fibers and transportation by animal. Paints would be either milk or lead based, just like they were 300 years ago.

    #8
  9. 5alive

    Yeah, and hotel rates are ridiculous there for what you get!

    #9
  10. bcullum

    It is great that we are increasing our domestic production. But if we do not increase our domestic refining capabilities, increasing raw oil production will not do us any good.

    Currently domestic fuel prices are increasing steadily, while we are exporting refined products. Putting a penalty on exports would help keep product here, but how would it affect price?

    Trading oil futures needs to be restructured to require actual delivery. This would reduce the speculation aspect, which would keep prices more in line with reality.

    #10
  11. AvailableUserName

    “That picture is a bit misleading and dated.”

    That’s the Spindletop gusher, 1901. Once again, Fuel Fix grabs a handy stock photo and slaps it on an article, regardless of how remotely related.

    #11
  12. mark

    I was there during the bust of the 1980′s. If you bought one house you could buy a second one for a dollar. It was really that bad. Anyway back then They had a CO2 pipeline they used for basically “fracking” as the high pressure would break up the formations an allow the wells to flow a little better. Plus the pressure helps push the oil up because of the higher pressure. Seems water fracking works much better because the water would settle to the bottom while the oil would rise more to the top.

    #12
  13. Jackalope

    TexasSpartan, most of today’s production was years in appraisal, development and exploration. Those are costs companies incur long before they see any benefit. The impact of the offshore moratorium will be felt 3-5 years from now.

    #13
  14. Chuck is right. I’m typing this on a plastic keyboard and looking around at what’s near my desk. Water bottle, phone, television, printer, electric fan, window blinds, you name it. Petroleum is necessary for all of this stuff.

    #14
  15. Paul

    Chuck and dahowa, the oil that we use for those things can be obtained by growing hemp…and also…we don’t need oil or gas to get from point A to point B. We have had hydrogen and nuclear technologies that could power our transportation systems (it would be nice if we actually had one of those, as well) for decades now. We could also use solar and wind energy to power our electric needs. We could also slow down on our consumption…of course that would require being responsible human beings.

    #15