A new discovery in the Permian Basin is challenging the narrative that shale oil and gas in the United States is declining.
The United States Geological Survey (USGS) has released its assessment of undiscovered gas and oil in the Woodford and Barnett shales in the Permian Basin, assessing that there are technically recoverable resources of 28.3 trillion cubic feet of gas — enough to supply the United States for 10 months at the current rate of consumption — and 1.6 billion barrels of oil, or 10 weeks’ supply.
If that doesn’t sound like much, consider that since the 1990s, the Woodford and Barnett shales have only produced 26 million barrels of oil, the equivalent of one day’s consumption. From the Jan. 14 USGS news release:
The Permian Basin has long been one of the most abundant sources of U.S. energy. The organic-rich shales of the Woodford and Barnett occur up to 20,000 feet below the surface, at greater depths than other resources in the Permian. Advances in unconventional production – hydraulic fracturing and horizontal drilling – now make it possible to produce energy resources from previously inaccessible and technically challenging formations, such as the Woodford and Barnett.
However, there are challenges in recovering the oil and gas trapped in this particular shale rock. Toti Larson, principal investigator at the Bureau of Economic Geology’s Mudrock Systems Research Laboratory at the University of Texas, which specializes in shale research, told the Houston Chronicle that the reserves are deeper than the formations where companies traditionally drill, and hotter, meaning they contain more associated gas. In the Barnett there is more clay, which poses drilling hazards.
“And then the other complexity is just really trying to identify the sort of sweet spots,” Larson said. “Where across the Permian Basin is the Woodford most likely going to produce oil? And so I think that’s what makes the Woodford still an exploration target.”
The discovery in the Permian Basin, which straddles West Texas and New Mexico, comes at a challenging time for US shale.
The United States is rushing to sell off millions of barrels of Venezuelan oil after the Trump administration ousted and detained leader Nicholas Maduro on Jan. 3.
The Department of Energy is organizing the sale of about 50 million barrels of oil that the United States seized from Venezuelan tankers.
Today’s oil market is already saturated, faced with a persistent global oil glut, and oil companies can’t afford for prices to dip much lower than their current levels of around $60 per barrel. Production is already projected to exceed demand in 2026, thanks in large part to OPEC’s reversal of production cuts over the last year, without even factoring in a Venezuelan oil renaissance.
