Mega Oil And Gas Discovery In The Permian Basin Doubles America’s Energy Reserves
American Energy Reserves
- March 12, 2019
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There was a time when America’s natural resources seemed to be depleting fast, but new discoveries of oil and natural gas in the Permian Basin have demonstrated new possibilities of high shale-oil production capability and a renewed exports surge (that had until 2015 been banned for fear of domestic resource depletion).
Massive Gas Reserves Found in the Permian Basin
On 28th November, the United States Geological Survey published its most recent resource assessments done in the Permian oil and gas basin that is located in Western Texas and Southeastern Mexico. The reserves found are reportedly the largest pool of resources on the planet.
The Permian basin is already the country’s largest crude oil producing region (contributing to one-third of the total oil production of the country) and this newly found reservoir is great news for the American economy.
The United States Geological Survey assessment has been one of the first detailed studies of continuous resources in WolfCamp and Bone Spring within the Delaware Basin.
The numbers put out by the USGS claim that the Permian Basin holds over 46 billion barrels of oil, 280 trillion cubic feet of gas, and 20 billion barrels of natural gas liquids inside its low permeability shale formations.
The Magnitude of the Discovery
To understand the magnitude of these findings, the numbers can be compared with earlier statistics. Towards the end of 2017, total proven crude oil reserves in the US stood at about 40 billion barrels while natural gas reserves amounted to 465 trillion cubic feet.
After adding the numbers from the recent discoveries to these figures, numbers show that America’s total oil and gas reserves have gone up by 100% and 65% respectively.
The USGS findings incorporate estimates for unproven reserves (which are calculated based on geologic knowledge and theory) and technically recoverable resources (which are available using current industrial technology).
The vast potential of these recently discovered reserves lies in the fact that America has found enough resources to last a long time.
Global consumption of oil and natural gas per day is 100 million barrels and 0.36 trillion cubic feet respectively. Now, the United States has enough oil to meet global demands for an entire year and natural gas to last even more.
Big Benefits to the American Economy
At the current global cost of $50 per barrel for oil and $3.75 per million Btu (British thermal unit) for natural gas, the Wolf Camp Shale and Bone Spring Formation are worth an incredulous $2.3 trillion in oil and $1.1 trillion in natural gas, considering the volume of both these resources that has been found.
American total national debt stands at $22 trillion right now which continues to grow because both parties still have their priorities screwed up (why do we have troops in Europe and why did we waste trillions on Obamacare?). The above-estimated amounts may not be enough to repay it, but the tax revenue from companies operating in the basin will greatly benefit the local and national economy.
The income incurred through taxes on these huge deposits can help fund education, infrastructure and defense sectors.
While one can celebrate the discovery of this gold mine, transporting the materials is a different ball game altogether. Current transportation infrastructure capacity is inadequate, but major pipeline and railroad projects that are due to be completed by 2020 might be the solution.
Pipelines are awesome!