NYT: “Oil Hidden in Shale Sets Off a Boom in Texas,” Thanks to Fracturing Technology
While most Americans were (rightfully) too busy over the Memorial Day weekend to grab a hard copy of Saturday’s New York Times, the paper ran a well-researched and balanced front-page article, written by Clifford Krauss, highlighting the impact that hydraulic fracturing – a 60-year-old oil and natural gas stimulation technology – is having on small, rural communities across South Texas, as well as for our nation’s energy security.
Under the headline “Oil Hidden in Shale Sets Off a Boom in Texas” (the online version goes with “Shale Boom in Texas Could Increase U.S. Oil Output”, which was featured on the Drudge Report), Krauss takes a deep look at the abundant, job-creating American oil resources that are being leveraged in South Texas from the Eagle Ford shale formation. This from the article:
Eagle Ford Background:
Until last year, the 17-mile stretch of road between this forsaken South Texas village and the county seat of Carrizo Springs was a patchwork of derelict gasoline stations and rusting warehouses.
Now the region is in the hottest new oil play in the country, with giant oil terminals and sprawling RV parks replacing fields of mesquite. More than a dozen companies plan to drill up to 3,000 wells around here in the next 12 months.
The Texas field, known as the Eagle Ford, is just one of about 20 new onshore oil fields that advocates say could collectively increase the nation’s oil output by 25 percent within a decade — without the dangers of drilling in the deep waters of the Gulf of Mexico or the delicate coastal areas off Alaska.
The technique, also called fracking, has been widely used in the last decade to unlock vast new fields of natural gas, but drillers only recently figured out how to release large quantities of oil, which flows less easily through rock than gas.
Onshore American Oil Production a Jobs Boon:
The companies estimate that the boom will create more than two million new jobs, directly or indirectly, and bring tens of billions of dollars to the states where the fields are located, which include traditional oil sites like Texas and Oklahoma, industrial stalwarts like Ohio and Michigan and even farm states like Kansas.
The oil rush is already transforming this impoverished area of Texas near the Mexican border, doubling real estate values in the last year and filling restaurants and hotels.
“That’s oil money,” said Bert Bell, a truck company manager, pointing to the new pickup truck he bought for his wife after making $525,000 leasing mineral rights around his family’s mobile home. “Oil money just makes life easier.”
“Oil money just makes life easier,” said Bert Bell, a truck company manager. He bought his wife a new pickup truck after making $525,000 leasing mineral rights around his family’s home and was able to replace retirement savings that had been lost during the recession.
Credit: Michael Stravato for The New York Times (More NYT photos HERE)
Yergin: “This is like adding another Venezuela or Kuwait”:
“This is very big and it’s coming on very fast,” said Daniel Yergin, the chairman of IHS CERA. “This is like adding another Venezuela or Kuwait by 2020, except these tight oil fields are in the United States.”
In the most developed shale field, the Bakken field in North Dakota, production has leaped to 400,000 barrels a day today from a trickle four years ago. Experts say it could produce as much as a million barrels a day by the end of the decade.
The Eagle Ford, where the first well was drilled only three years ago, is already producing more than 100,000 barrels a day and could reach 420,000 by 2015, almost as much as Ecuador, according to Bentek Energy, a consultancy.
Onshore American Oil Production Creating Recession-Proof Economic Conditions:
Thanks to the drilling boom, the recession bypassed North Dakota entirely. Here in Dimmit County, Tex., the unemployment rate has fallen in half, and sales tax receipts are up 70 percent so far this year, allowing the county to hire more police officers and buy sanitation and road repair equipment.
“In my lifetime, this is the biggest thing I’ve ever seen,” said Jose Gonzalez, 78, a retired teacher and son of migrant farm workers, who leased mineral rights to Chesapeake for $27,000 and sold another plot for $100,000 to a company building an RV park for oil workers. “You can see I’m happy.”
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