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Page added on December 28, 2012
US on new track to catch Saudis in oil production
Despite rising gas prices, oil production is surging in this country. That has some predicting the U.S. could eventually overtake Saudi Arabia as the world’s largest petroleum producer by 2020.
In the middle of a Colorado cornfield, sandwiched between cattle and farm houses, is the front line of an American oil boom.
“We plan to invest over $8 billion over the next five years here, so we’re really excited,” said Mike Dickinson, who works for Noble Energy, which is doubling it’s production in Weld County.
This oil field stretches from Colorado into Wyoming. In 2008, it produced more than 83,000 barrels of oil. Yet this year it is expected to reach nearly 10 million barrels.
The technology being used is “unrecognizable today compared to what we were doing just two or three years ago,” Dickinson said.
Oil companies used to mainly drill vertical wells hitting one pool of oil. But now they are rapidly converting to horizontal wells up to a mile long, and combining them with fracking operations which splits open rocks releasing oil once considered out of reach. One drilling rig can now install multiple wells in the same location, making it more cost efficient.
A horizontal well produces seven to 10 times more oil than a vertical well.
“Today we’re not running any vertical rigs and we’re running eight horizontal,” Dickinsons said, added that this is the future of the business.
The industry insists fracking is safe but is worried about an upcoming EPA report that could heighten environmental concerns over water contamination from fracking — and the 2 to 10 million gallons of fresh water it takes to operate one horizontal well.
“Once that water goes into the ground and is mixed with the other chemicals, it’s poison essentially. It has to be disposed of,” said Jason Bane of Western Water Advocates. “The overall concern is we don’t know enough to be going ahead this quickly with fracking.”
The technology is dramatically boosting overall U.S. oil production, which is up 25 percent since 2008 and is expected to jump another 30 percent by the end of this decade. The oil boom has created 1.7 million jobs.
It’s also made places such as Greeley, Colo., flush with cash.
“This really has been a godsend to our county,” said Sean Conway, a commissioner in Weld County, where 50 percent of the budget is now funded by oil and gas taxes.
“It allows us to pay for things in cash,” Conway said, adding they now very much like their friends in the oil and gas industry.
Out in the cornfields, the drilling continues, another 11 million barrels per day closer to catching the Saudis and the Russians.
11 Comments on "US on new track to catch Saudis in oil production"
Beery on Fri, 28th Dec 2012 2:54 pm
“A horizontal well produces seven to 10 times more oil than a vertical well…”
…for about 3 years, if you’re lucky.
Let’s hope the folks cashing in on the boom are putting some of their winnings aside for a rainy day.
Arthur on Fri, 28th Dec 2012 3:44 pm
“We plan to invest over $8 billion over the next five years here”
In 0:09 he clearly says 8 MILLION, not billion.
Steve Foster on Fri, 28th Dec 2012 4:16 pm
Another puff piece that carries the odor of propaganda.
Any mention of the rate of depletion of such wells and the sustainability of any significant production ramp? Nope. Fracking and horizontal drilling methods have been known for decades. It is disingenuous to push the idea that this is somehow a new innovation.
What IS new is the PRICE of oil.
What about the economics, eh CBS? There is plenty of hard-to-get and low-grade oil that can be produced at $100 – $150 / bl, I’m sure a massive amount more at $300/bl. But, what are the implications to our economy when it costs 10 times more to produce a new barrel than it did 20 years ago? What happens when all these wonder-wells start crashing with 50%-60% / yr depletion rates?
Yeah, I know – lets not talk reality, lets PARTY ON! A NEW DAWN OF WONDER AWAITS.
Mike on Fri, 28th Dec 2012 4:49 pm
I assume that Peak Oil News posts these articles so that smart people concerned about the energy future of our country knows how utterly stupid the other side is?
This was dandy. Good ‘ol CBS, you can always count on those clowns for precise invesigative reporting.
Plantagenet on Fri, 28th Dec 2012 5:38 pm
Drill baby drill.
You know—that actually worked!
SilentRunning on Fri, 28th Dec 2012 6:11 pm
“A horizontal well produces seven to 10 times more oil than a vertical well.”
This claim is deceitful. It may be true that a horizontal well produces more oil than a vertical well, but the whole measurement is relative TO THAT LOCATION.
These wells will be expensive, and will quickly play out – the oil will be largely gone in 3 years – and then new expensive wells will have to be drilled to replace them.
They are most certainly NOT the gusher oil fields of Texas or Saudi Arabia. They are deep, expensive wells that deliver meager amounts of oil and then quickly deplete.
Meanwhile, the traditional wells are continuing their decline.
dissident on Fri, 28th Dec 2012 6:33 pm
Regarding the 10 times more oil from a horizontal well factoid: you can’t get more water out of a glass just because you suck on the straw 10 times faster. There is something called conservation of matter-energy and these CBS illiterates should look it up.
The only thing new is that fracking has allowed exploitation of oddball reservoirs like the Bakken (a dolomite/sandstone layer sandwiched between two shale layers). Why don’t all these BAU propagandists tell us all how many Bakkens are out there? That would actually be useful information.
MrEnergyCzar on Fri, 28th Dec 2012 7:38 pm
What’s the EROEI?
MrEnergyCzar
GregT on Fri, 28th Dec 2012 9:12 pm
Yep, cash is king.
Who cares if you don’t have any water to drink when you have all of this wonderful “Cash”.
Drill, Baby, Drill!
Ham on Fri, 28th Dec 2012 10:58 pm
The only thing the US will catch up Saudi in, is Autocracy. They will never match the oil subsidy, which is effectively in decline everywhere. Once the litany of Ponzi schemes are exposed for what they really are, and I include shale gas fracking, there will just be an implosion that no amount of rejigging can remedy.
BillT on Sat, 29th Dec 2012 4:42 am
MrEnergy, yes, where is the EROEI figures? What is the NET energy of these wells? What is this new lie based on besides hope and dreams?
I’ll tell you where. In DC where the bullshit is being exported from. There and Wall Street. The lies that we can grow our economy is becoming more and more obvious with the exponential number of ‘stories’ coming out to say it is possible.