When I first got involved in the oil industry way back in the mid 1970’s it was boom times. Money was flowing freely and recent college grads like myself were heading into the oilfields in numbers never before seen. In hind sight I thought that was a boom. Little did I know, that was nothing.
It wasn’t long before boom turned to bust and I have experienced several similar cycles since then. Those in the know told us that US and world production had long since peaked and the good old USA would head into eternity dependent on foreign crude oil supplies and that our high rolling lifestyle would soon become a thing of the past.
A couple of things happened on the way to the demise of our standard of living as we then knew it. A new technology was invented between our shores involving horizontal drilling and hydrofracing. Secondly, countries like China, Taiwan, and India, which had been stuck in the 20th century for decades, became progressive society’s greatly escalating their thirst for energy. Suddenly, or at least over the past couple of decades or so, our great society is being reborn.
It certainly isn’t due to global government’s and I am in too good of spirits to delve into our domestic leadership issues other than to say I just hope they learn to some degree to get the hell out of the way of the entrepreneur’s in our country. Just the other day I heard that Our President was still pushing alternative energy while at the same time T. Boone Pickens announced that one of his endeavors had completed some 70 NGL stations with plans for a nationwide buildout which would allow up to harness vast newly discovered natural gas reserves in our vehicles. You be the judge on who knows what they are doing??
First it was the Barnett shale reservoir on the outskirts of cowtown where several thousand’s of wells have been drilled to date. Then the Bakken formation primarily residing in North Dakota became the place to be. More recently the Eagleford shale in deep South Texas began grabbing the headlines. There are also a number of other smaller shale oil reservoirs and shale formations that are currently only being drilled to hold valuable leases due to their reserves being gas and not oil and with gas selling at a fraction currently of oil per BTU equivalent, we will see their impact once gas prices recover. The net effect is that billions upon billions of dollars are fleeing more conservative investments for the energy sector and propping up our economy in spite of our politicians.
North Dakota recently surpassed Alaska in daily production of crude and my bet is the new technology and the Bakken has more than a little to do with it with estimated reserves of over 10 billion barrels and yes that is with a B. I have heard estimated reserves in the Eagleford of upwards of 25 billion barrels. Recently the various Wolfcamp formations including the huge potential of the Cline Shale in my old stomping grounds of West Texas have been estimated to contain considerably more reserves than the Bakken and Eagleford combined which, if true, could make it the second largest field in the world. Amazing!! Prior to the advent of horizontal drilling we in the industry had pretty much rolled the carpet up on discovering even one billion barrel fields.
Nowadays, the USA is ground zero for growth in worldwide discovery and production of petroleum and will remain so for the foreseeable future.
It is realistic that we could become a net exporter over the next couple of decades. Our biggest risk to achieving this is overproduction of oil and gas leading to an imbalance in supply and demand and a crash in commodity prices. I would have never believed this was possible even a few years back.
In closing, I would just like to say kudos to my peers in the most important industry in the world, and ask that our politicos focus their efforts elsewhere. We can actually fix this economic mess we are currently in. Believe and invest in America, the petroleum industy holds the key!!