A new assessment by the U.S. Geological Survey (USGS) finds the Permian Basin in western Texas and southeastern New Mexico, already recognized as one of the richest oil and gas regions in the United States, contains even more oil and gas than government and industry experts previously estimated.
Underlying an area approximately 250 miles wide and 400 miles long, the Permian Basin is a series of geological formations that have been the site of extensive development in recent years. According to USGS’s December 6 assessment, the area’s oil and gas fields’ most prolific days are yet to come.
USGS, a division of the Department of Interior, found the Wolfcamp Shale and overriding Bone Spring Formation in the Delaware Basin section of the Permian contain an estimated 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids.
Ensuring ‘Energy Dominance’
Previously, many portions of the Permian Basin were not considered viable sources for oil and gas production, USGS Director Jim Reilly, Ph.D., said in a press statement.
“In the 1980s, during my time in the petroleum industry, the Permian Basin and similar mature basins were not considered viable for producing large, new recoverable resources,” Reilly said. “Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential.
“The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” Reilly’s statement said. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
Oil and gas companies are currently producing oil in the region using both traditional vertical well technology and horizontal drilling combined with hydraulic fracturing (fracking).
In 2016, USGS assessed the Wolfcamp Shale in the Midland Basin portion of the Permian and found it holds the largest continuous oil reserves the agency ever estimated. USGS’s 2018 assessment of the oil and gas resources in the Delaware Basin’s Wolfcamp Shale and Bone Spring Formation in the Permian found them to be twice as large as the 2016 estimate of resources found in the Midland Basin.
Technologies Increasing Resources
Walter Guidroz, coordinator of the USGS Energy Resources Program, says new technologies are making more oil and gas resources available for development.
“The results we’ve released today demonstrate the impact of improved technologies, such as hydraulic fracturing and directional drilling, have had on increasing the estimates of undiscovered, technically recoverable continuous (i.e., unconventional) resources,” Guidroz said in a press statement.
USGS assessments are generally on the conservative side, so the amount of usable oil and gas in the Permian basin may even be greater than the agency estimates, says Jay Lehr, Ph.D., science director at The Heartland Institute, which publishes Environment & Climate News.
“The USGS, among the most prestigious of our government’s science agencies, spent two years studying the technologies being applied to the Permian Basin to develop its assessment of the reserves available for possible development,” Lehr said. “The agency’s assessments are always conservative, so you can take it to the bank this area contains as much or more oil and gas than USGS predicts.
“This is great news for America and negates efforts by OPEC to manage its oil in ways intended to undermine the U.S. petroleum industry,” said Lehr.
‘Ingenuity Trumps Resource Constraints’
With the right incentives, people figure out ways to develop resources in ways previously not thought possible, says Jordan McGillis, a policy analyst with the Institute for Energy Research.
“The USGS announcement is yet further confirmation of the late economist Julian Simon’s hypothesis that human ingenuity trumps resource constraints,” McGillis said. “It’s hard to believe just a decade ago we were being warned of a dwindling petroleum supply and a coming age of perilous scarcity.
“The fact of the matter is creativity, buttressed by the incentives provided by the operation of free markets, continues to improve our access to resources,” said McGillis.
Bonner R. Cohen, Ph.D. ([email protected]) is a senior fellow at the National Center for Public Policy Research and a senior policy analyst with the Committee for a Constructive Tomorrow.