Early Gift

Permian Basin oil, gas reserves much higher than previously thought

Christmas came a few weeks early this year. At least that is the assessment of U.S. Secretary of the Interior Ryan Zinke, who said those words in a press release last week announcing the discovery of the nation’s largest continuous oil and natural-gas reserves.

According to the U.S. Geological Survey, a portion of Texas and New Mexico’s Permian Basin contains a staggering 46.3 billion barrels of oil and 281 trillion cubic feet of natural gas.

“American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation,” Zinke continued.

It sure looks like that’s true. The estimate effectively doubles U.S. onshore oil and gas reserves. But we have to remember all of this is an estimate of potential recoverable reserves. The stuff isn’t out of the ground yet.

And while new technology such as fracking allows the oil industry to get at deposits previously unreachable, the reality is that oil prices must justify all that expense of production. So don’t think a glut of this new oil is suddenly going to drop gas prices down into the single digits.

Still, the prospect of an energy independent America for generations to come is something we should all welcome.