Permian Basin loaded with promise
U.S. Geological Survey says vast oil resource could hold more riches
ALBUQUERQUE, N.M. — Some of the largest energy companies in the U.S. have already invested billions of dollars on claims up and down the Texas-New Mexico state line, tapping one of the nation’s richest and most prolific oil and natural gas regions.
Now the stakes just got higher, as the U.S. Geological Survey released a new assessment Thursday that shows portions of the Permian Basin could hold even more promise.
With the potential to double the nation’s onshore oil and gas resources, the agency estimates more than 46 billion barrels of oil and some 280 trillion cubic feet of gas are within two formations on the southwestern side of the basin. That’s the largest continuous oil and gas resource potential ever assessed.
While agency geologists caution that more study would be needed to determine the profitability of going after the resources, industry groups and top officials within the Trump administration are encouraged and say the assessment underscores the activity that’s already happening in the basin.
“Before this assessment came down, I was bullish on oil and gas production in the United States,” Interior Secretary Ryan Zinke said in a statement. “Now, I know for a fact that American energy dominance is within our grasp as a nation.”
The announcement comes as OPEC countries voted yesterday to cut oil produc- tion beginning next year as a way to force crude oil prices higher despite political pressure from President Trump. The group of oil-producing nations was looking to rein in supply as prices had fallen about 25 percent because major producers, including the U.S., have been pumping at high rates.
Producers throughout the Permian were closely watching yesterday’s developments and there were no indications of things slowing down in the oilfields.
Stephen Robertson, executive vice president of the Texas-based Permian Basin Petroleum Association, said the signs for the basin’s potential have been there for a long time.
“The fact is that Reeves County, which in the heart of that play, is running more rigs than any other county in the nation and has been doing that for quite a while,” he said. “The people out here know that it’s there and it really is that improvement of the technologies and the increased efficiencies allowing people the ability to actually be able to access it and produce it.”
Still, a main factor is price. “If the price drops to a point where it’s not economical, then it doesn’t matter if it’s there. It’s not going to be produced,” Robertson said.