Guest congratulating by David Middleton
USGS Announces Largest Continuous Oil Assessment in Texas and New Mexico
Release Date: NOVEMBER 28, 2018
Estimates Include 46.3 Billion Barrels of Oil, 281 Trillion Cubic feet of Natural Gas, and 20 Billion Barrels of Natural Gas Liquids in Texas and New Mexico’s Wolfcamp Shale and Bone Spring Formation.WASHINGTON – Today, the U.S. Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion barrels of oil, 281 trillion cubic feet of natural gas, and 20 billion barrels of natural gas liquids, according to an assessment by the U.S. Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources.
“Christmas came a few weeks early this year,” said U.S. Secretary of the Interior Ryan Zinke. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I know for a fact that American energy dominance is within our grasp as a nation.”
“In the 1980’s, during my time in the petroleum industry, the Permian and similar mature basins were not considered viable for producing large new recoverable resources. Today, thanks to advances in technology, the Permian Basin continues to impress in terms of resource potential. The results of this most recent assessment and that of the Wolfcamp Formation in the Midland Basin in 2016 are our largest continuous oil and gas assessments ever released,” said Dr. Jim Reilly, USGS Director. “Knowing where these resources are located and how much exists is crucial to ensuring both our energy independence and energy dominance.”
[…]
The new assessment of the Delaware Basin Wolfcamp shale may be found online. To find out more about USGS energy assessments and other energy research, please visit the USGS Energy Resources Program website, sign up for our Newsletter, and follow us on Twitter.
I worked with Jim Reilly at Enserch Exploration from 1981-1995.
The “amazing” thing is that this isn’t a “new” oil discovery. It’s just a realization that a lot more oil and gas can be produced from these formations than was previously imagined.
The Permian Basin a nearly infinite resource. It seems as if there will always be more hydrocarbons to squeeze out of its numerous oil & gas reservoirs. From a Warmunist perspective the Bone Spring and Wolfcamp are much worse than previously thought… Since Warmunists seem to think that we are on course for a repeat of the Permian extinction. Clearly the carbon now stored in the Permian Basin oil must have caused the “Great Dying” and if we don’t stop producing it, we’ll cause another “Great Dying”. At least, that’s as close as I can get to a Warmunist thought process.
My rough calculation suggests that that is enough oil and gas to keep the UK going for 100 years. I like a perspective of this kind as we do when we measure areas in terms of the size of Wales.
Will be nice to get all that awful pollution out of the ground and burn it. 😉
Even if we manage to run through most of the Permian field in a reasonably short (human lifetime) period, there are a lot of smaller fields across the country that still hold a ridiculous amount of oil. They were mostly abandoned when the standard extraction methods were no longer useful.
My dad worked in the oil fields as a drill bit salesman for a long time (in east Texas), and he used to talk how much oil we were leaving in the ground because the known formations had a lot locked up.
For that matter, there’s a lot of old wells that were sealed up when they stopped pumping out enough oil with standard methods – but could be reopened and fracked at a fraction of the cost of drilling a new well (except it’s apparently still against the law to do so, for some reason).
It’s also generally impossible to re-enter a well that’s been plugged and abandoned.
It’s generally impossible because it’s against the law, not because of technical limitations.
It’s generally not possible to re-enter a well that has been plugged and abandoned (P&A’ed). And it’s generally not illegal. In rare cases where it is mechanically possible, it’s usually not economically viable.
If the well has been properly P&A’ed, It’s been plugged with cement and the casing has been cut off below ground level (mud line offshore). We can’t even re-enter offshore P&A’ed wells drilled from producing platforms for the purpose of sidetracking them. We have to perform a slot recovery (https://www.slb.com/services/well_intervention/well_abandonment/slot_recovery.aspx). It’s a relatively expensive and mechanically risky procedure, which can be more expensive than drilling a new well.
If there was a reason to re-enter it, it would be cheaper and safer to drill a new well.
Furthermore, most frac’ing plays require horizontal completions to be economically viable.
David, there are about 50,000 wells that were not irredeemably plugged that can be re-entered for more intensive fracking. By about 2015, EOG (a piece of former [Enron]), the most innovative of frac oil and gas producters, began increasing frack sand employment, bigger fracs, and closer spaced fracs with excellent improvements in production. They basically were only in a learning curve a decade ago.
Regarding the USGS estimates, it is clear that this study had to have been done during Obama’s tenure, but the authors not permitted to publish it. One couldnt cobble together a study of this size just since Trump arrived! I’m sure Trump’s Secretary found this gem pretty much ready to go when he was confirmed for the job.
Incidentally, the USGS used to have a reputation for underestimating resources. I don’t know about now.
Dang, Enon should read ENRON.
Abandoned wells that were not properly P&A’ed are not suitble for anything. They are potential company-ending liabilities. Most shale and tight formation completions require horizontal or lateral completions. Old, improperly P&A’ed vertical wells aren’t useful for anything other than proper P&A’ing. Most of them either watered-out, in which case frac’ing would be pointless or they pressure-depleted, in which case an attempt to re-enter the well and recomplete it with modern stimulation measures would probably be pointless and expensive.
Enron spun EOG off as a seperate company in the early to mid 1990’s. They spun off EOG because they determined that they could make more money off derivatives and derivatives of derivatives than they could actully producing and delivering an actual product.
USGS published a lot of good stuff during the Obama maladministration. USGS and the EIA were the only two agencies that didn’t seem to go full greentard. But they will probably continue to underestimate what the oil industry will find and produce.
David and Old Geologist
I’m involved in a Witswatersrand gold system, as an investor, on the border between Colombia and Brazil.
It is very similar to those systems found in South Africa.
One of the identifying features are thin layers of bitumen-stuff.
Associated with the alluvial gold laid down in Pre-Cambrian times.
Don’t know where to look to understand how the “bitumen” got there.
That’s some interesting stratigraphy.
O &G are fluids and can get into the Precambrian with plumbing available. Rift valleys are underlain by deep fractures and down-dropped blocks (grabens). These are all over the globe, only starkly evident in East Africa. Chains of carbonatite intrusions (Ca, Na, Fe carbonate lavas often in circular “pipes” and diamond fields) are associated with these rifts. A chain of these crosses southern Quebec and extends westward through part of Ontario (for Quebec, see Monteregion Hills). Mount Royal, the old English name for Montreal is centered by one of these carbonate plugs and is a lovely green lofty park.
In Malawi, they mine cabonatite for making cement.
I just hope that those nations in the Middle East who support Terrorism against the West find themselves running out of cash as the West finally developes its own energy of all varieties. Both oil and nuclear.
MJE
https://dailycaller.com/2014/12/05/obama-in-2012-we-cant-just-drill-our-way-to-lower-gas-prices/
Ha ha! What a goof! History will not be kind to Obama. And then there’s this one:
“Today, there is no greater threat to our planet than climate change.”
https://www.washingtonpost.com/blogs/post-partisan/wp/2015/04/20/the-insiders-obamas-global-warming-distraction/?utm_term=.da9149b9688f
David Middleton
Your article plus the comments are an example of why I keep coming back here most every day.
Thank you. I really do appreciate your efforts.
Jon
Seconded.
I’m just glad I can give something back to Anthony Watts and this vital forum.
Thanks be to God!
This news make my “Permian Mojo” cap from Odessa more apropos than ever.
David …
“The Permian Basin (is) a nearly infinite resource.” ?
I hate to rain on the parade, but I recall the USGS declared that there was 20 billion barrels of recoverable oil in the Wolfcamp a while back. Looking at their study it would take 200,000 mile long horizontal wells that would require extensive hydraulic fracturing. At the time of this release oil was $45/bbl. So estimating $5 million per well times 200,000 wells would require a trillion dollars to produce that would generate gross revenues of $900 billion. This does not include the cost of the leasing of the lands $1000/acre x 160 acre x 200,000 wells=$320 million, royalty deduction of 25% of the gross x $900 billion= $225 million. Then the state of Texas severance tax on oil of 4.62%= $41.6 million and finally operating expenses to pump the oil. Assuming lifting costs of 10% of the gross then Wolfcamp oil should only cost around $90/bbl to breakeven. Finally, the Wolfcamp and the Bone Springs are not shales they are carbonates that have been produced for decades. A typical vertical well in these reservoirs declines rapidly and then levels out and produces 5 to 10 bopd “stripper” production for decades where most of its reserves are recovered. This requires that the artificial lift pumps be set at or near the very bottom of the hole. The technology to reduce the bottomhole flowing pressure necessary to produce stripper oil in a deviated hole for an extended time does not exist.
Nobody is going to try to extract every barrel of technically recoverable oil. While it varies from company to company, the average breakeven price for the Wolfcamp and Bone Spring is in the high $50’s.
Improvements in technology and/or higher oil prices make more of the technically recoverable oil economically recoverable.
Lots of formations are euphemistically referred to as “shale” even though they aren’t really shales.
Great news, indeed! A secondary bonus could be that this will trigger in Weepy Bill McKibbon into a Fred Sanford style “big one.”
https://www.youtube.com/watch?v=NK9HXu9g5qA
Just kidding, Bill. May you have a long an happy life, unencumbered from pointless worry.
Be careful… he might quote you out of context in the New York Times.
ha ha ha,
Thanks for the warning, David. I guess I’m not too worried, because in the TV episodes, old Fred was never really having a heart attack. He was only FAKING IT in order to emotionally manipulate others. Which describes Weepy Bill McKibbon pretty well, too, now that I think of it. Although when Fred did it, it was obvious, funny and adorable. When Bill and Bernie, and now AOC do it, it’s just really annoying.
Peak oil does not exist – in a meaning that use of hydrocarbon fuels will stop. They can be synthesized from different carbon sources starting from CO2. Of course you need energy, which can be obtained from nuclear, geothermal and other sources.
Organic fuels are already available: https://www.upmbiofuels.com/
The largest oil reservoir by far is the offshore Artic. This enormous resource would have little interest by oil companies if ANWAR were not opened up and the pipeline extended making transportation of oil feasible.
The Alaska OCS resource potential is large, but it’s not even the largest offshore resource under Federal control…
The undiscovered resource potential in the deepwater Gulf of Mexico is larger. And the Permian Basin resource potential is about 20 times that of the Gulf.
David Middleton
FFS!? Seriously?
I’d just to make one observation from an ignoramus (me, if anyone was in any doubt). If there is so much oil in Alaska, that presumably means it was covered in vegetation several million years ago.
So what’s the benefit of ice all the green idiots are idiots are whinging about?
Oil isn’t formed from vegetation. It’s primarily formed from algae and phytoplankton.
Two thoughts:
1. It’s shocking that 94% of federal offshore acreage is off limits to development.
2. The amount of natural gas in those areas, just in the form of methane hydrates, is not well quantified, but it’s enormous! In 2013, the Bureau of Ocean Energy Management estimated that methane hydrate formations along the U.S. East Coast contain at least 21,702 tcf of natural gas, with the greatest concentrations located offshore between Rhode Island and North Carolina. At current US consumption rates (approximately 25 tcf per year), that’s over 800 years worth of natural gas.
Methane hydrates on the US OCS represent about 1,000 years worth of natural gas.
Link exchange is nothing else however it is simply placing the other person’s weblog link on your page at suitable place and other person will also do similar in favor of you.
Thanks Dave,
I always enjoy your insight and comments. I’ve been working the Permian Basin for the last 10 years now and I’m simply amazed at the technology changes that have made these basins (Midland & Delaware) so prolific.
Wallace Pratt one of the founders of the AAPG who spent much of his personal and professional life in the Delaware Basin and donated over 5,000 acres to form the McKittrick Canyon Unit of the Guadalupe Mountains National Park would have been the first to say to our old Friend “Big Jim Reilly”; “See, I knew there was oil out here”
Hoo-Fracking-Ahh!
🍻
Superb discussion,
I am much smarter now about oil and gas,
Many thanks from Chicago