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Page added on October 4, 2013
An Energy Boom That Could Last
For a bursting oil region like Texas, experience is an asset
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.
19 Comments on "An Energy Boom That Could Last"
george on Fri, 4th Oct 2013 5:36 pm
thanks for the laugh
peakyeast on Fri, 4th Oct 2013 6:23 pm
Cutting edge technology – soon future technology is needed.
More drilling than ever before to produce much less of significantly poorer quality than ever before.
rockman on Fri, 4th Oct 2013 8:17 pm
Well at least they got the part right that the “new” horizontal drilling and frac tech have been around for 20 to 30 years. Often the cornucopians like to say they’re brand new.
Permian basin production peaked in 1974 at 740 million bbls/year. For 2012 the production did increase in the last few years but still only at half the level, 315 million bbl/year. But there is a lot of drilling activity going on out there…twice as much as the Eagle Ford Shale play. But a big difference: the EFS wells are exploratory and trying to discover new reserves. The Permian Basin activity is mostly infield and EOR projects targeting known reservoirs. Which is a good thing and certainly adds to our production levels. Activity in the PB will stay high as long as oil prices stay high. But whether it ever increases to the level that created twice as much oil production as we have today remains to be seen.
SilentRunning on Fri, 4th Oct 2013 9:41 pm
the technological breakthroughs of Silicon valley over the past 30 years have yielded increases of performance of 1 thousand to 10 thousand times, while at the same time decreasing costs by factors of 100 or more.
The tech improvements in the oil/gas industry? Not so much.
Sure, they have squeezed some more hydrocarbons out of short lived wells at higher cost. That is in no way comparable to Silicon Valley.
If Oil/gas technology had the same effects as semiconductors – today gas would be so cheap that they would give away free fillups with every soda purchased.
BillT on Sat, 5th Oct 2013 12:28 am
Desperation breeds lies and exaggerations…
Brent on Sat, 5th Oct 2013 1:53 am
I think denial is now in full swing. This is just getting worse and I think it will not change until it is to late. http://video.foxnews.com/v/2717038294001/us-approaching-energy-independence/
dave thompson on Sat, 5th Oct 2013 8:10 am
Brent you got it right. That Fox link I could not stomach. This article and that link prove the happy talk news sources are being told to feed this meme of energy independence to all us gullible oh look we can all go to Disney land and have freedom cookies public. This energy/economic situation is a fraud.
J-Gav on Sat, 5th Oct 2013 8:55 am
It’s true that Midland-Odessa is booming right now – I’ve got a brother there riding high on the back of that one. Seems likely too that it will last longer in that particular region than most plays around the country but that hardly means that energy security is a given for the U.S. over the next X generations.
And it’s not as if energy is the only issue out there. Water is certainly a big one in the Midland area as they’ve been suffering through a nasty drought for several years now …
Arthur on Sat, 5th Oct 2013 8:58 am
Like SilentRunning says, over the past 34 years we have seen one spectacular IT breakthrough after the other. It began with the Apple-II home computer, which I used to collect data from small windturbines installed on the university test site to the Apple ipad3 I am using now to hack this post.
Meanwhile the world is growing tired with Windows 7, 8, 9… ad infinitum.
What we are going to see in the coming decades is an emerging extremely diversified energy industry, that will not create an energy nirwana, but will struggle to remain an energy status quo of sorts, while carbon energy will gradually abandon us. That energy industry will come up with ever more refined methods to harvest the last remaining carbon reserves, solar, wind, hydropower, hydrogen, storage, biofuel, algea, osmosis (blue energy), heat pumps, smart grids, energy conservation, replacing car miles with sending gigabits over a wire and thus enabling 60% of the work force to work from home with a headset and webcam, cloud based working, etc., etc.
The central measure of the past 34 years was kb, mb, gb and now tb (the latest usb drives).
The central measure of the coming decades will be kwh.
BillT on Sat, 5th Oct 2013 10:14 am
You still seem to forget the massive hydrocarbon powered system that makes ALL of your future toys possible. No windmill is going to repave your highway so the trucks can deliver the materials to the factory that makes them. No solar panel is going to rebuild the bridge over the rivers, or algae ‘oil’ to power the ships that are necessary to being the resources to your shores.
The ‘renewables’ that actually make it into the real world of mass production at a profit, will not last much beyond the last barrel of oil.
Arthur on Sat, 5th Oct 2013 11:55 am
Yes Bill, that is our fundamental disagreement. You maintain that you need carbon fuel to run a halfway liveable society, I say we don’t. In the long run the sun will provide all the energy we need. I repeat: in the long run. A kwh is a kwh, regardless of it’s source. Trains and cars can run on electricity. Maybe ultralarge vehicles cannot be powered by electricity –> biofuel. Ships can fall back again of windpower, like they did for centuries.
BillT on Sat, 5th Oct 2013 1:34 pm
Arthur, you need to look at how your toys can exist without the infrastructure built and maintained by oil. You will not begin to run even 50% of that infrastructure on ‘renewables’. How do you ‘renewable’ a road? Or a railroad? A freighter? A 1,000 ton mining machine? A smelter? Etc…
BillT on Sat, 5th Oct 2013 2:05 pm
And, no, sailing ships are not going to carry the materials for billions of people to have a techie lifestyle. Not even millions or thousands. How many different minerals/metals are in one PC, or I-pad? I’ve read that there are as many as 40 and most come from all over the world. Then there are the satellites and the rockets to put them in orbit, and the companies to make the rockets, and the …
shortonoil on Sat, 5th Oct 2013 4:14 pm
The energy now being supplied to the end consumer from petroleum is declining. The decline rate over the next 17 years will average 22 Quad (10^15) BTU/yr. Renewables which now account for about 2% of world energy production are supplying about 5.25 Quad/yr to the end consumer. Renewables would have to grow by 420% to compensate for the now ongoing yearly decline from petroleum.
J-Gav on Sat, 5th Oct 2013 5:44 pm
Shorton : Holy smokes! 22 quad/yr? That’s huge. Are you sure of that figure?
Brent on Sat, 5th Oct 2013 6:24 pm
Besides how will we pay for all this new renewable infrastructure? It does not come cheap and last I looked we were 17 trillion dollars in the hole.
GregT on Sat, 5th Oct 2013 7:09 pm
“replacing car miles with sending gigabits over a wire and thus enabling 60% of the work force to work from home with a headset and webcam, cloud based working, etc., etc.”
And what, exactly, do you propose that this 60% of the workforce will be working at? You appear to be missing a huge part of the picture here Arthur.
Technology, and human social complexity are the results of excess energy. Not the other way around. The so called ‘work force’ of today, for the most part, does not do REAL work. It is the energy from fossil fuels that is doing the work for us. As our energy surplus decreases, so will our social complexity and technologies, and so will our populations.
We cannot REPLACE fossil fuels with another energy source, because they are not equal in what they do for us. A kWh of electricity will not do the same things for us as an equal amount of energy from fossil fuels. They are not the same.
shortonoil on Sat, 5th Oct 2013 8:15 pm
“Shorton : Holy smokes! 22 quad/yr? That’s huge. Are you sure of that figure? ”
76mb/d * 365 days * 42 gallon/b * 140,000 BTU/gal = 160 Quad BTU/yr from petroleum. Even though production will only have fallen to 44mb/d by 2030, the average useable energy delivered to the end consumer will have fallen to zero. The 22 Quad/BTU is the 17 year average, the rate of decline increases with time.
How sure are we? – very.
The time frame is 2030 – 2035 because of the skewness in the distribution. Some fields may still be producing as we don’t know what the field distribution of ERoEI is for sure. One thing for sure, what oil that is left wouldn’t be affordable for the average person.
GregT on Sat, 5th Oct 2013 8:43 pm
Shortonoil,
“How sure are we?”
Who is we? Do you have a website?