The permian basin
BY THE NUMBERS
Texas is known for oil and natural gas, and thanks to the Permian Basin in West Texas, the Lone Star State isn’t just the top U.S. producer of these resources, but one of the top producers in the world.
Just how big is the most prolific shale play?
the permian has massive oil and gas resources
In December 2018, a U.S. Geological Survey (USGS) assessment of Texas’ and New Mexico’s Wolfcamp Shale and Bone Spring Formation in the Delaware Basin estimated the region holds 46.3 billion barrels of recoverable oil, the largest estimate of continuous oil the agency had ever assessed in the United States. Previous USGS assessments show the Permian’s Midland portion of the Wolfcamp Shale holds an additional 20 billion barrels of oil, while the Spraberry Formation holds another 4.2 billion barrels. These resources make the Permian Basin “one of the most productive areas for oil and gas in the entire United States,” according to USGS.
But the Permian isn’t just about oil. According to USGS, the Delaware Basin’s Wolfcamp Shale also holds the largest continuous natural gas resource potential in the United States with an estimated 281 trillion cubic feet of natural gas and 20 billion barrels of natural gas liquids. The Midland Basin’s Wolfcamp Shale holds an estimated 16 trillion cubic of associated natural gas and 1.6 billion barrels of natural gas liquids, while the Spraberry Formation holds an additional estimated 3.1 trillion cubic feet of undiscovered natural gas resources.
more than 70 billion barrels of oil
more than 297 trillion cubic feet of natural gas
over 22 billion barrels of natural gas liquids
the permian is delivering record-breaking oil and gas production
The Permian isn’t just America’s top oil producer – it’s one of the largest oil fields in the world. According to the U.S. Energy Information Administration (EIA), oil production in the Permian totaled about 3.6 million barrels per day (b/d) in November. That’s already more than what all but two OPEC countries and Russia produced, and IHS Markit predicts production will reach 5.4 million b/d by 2023.
The Permian also produced about 12.1 billion cubic feet of natural gas per day (Bcf/d) in November, with that number expected to reach about 15 Bcf/d by 2023 – a roughly 2.9 Bcf/d increase.
permian oil and gas production strengthens american energy security
The Permian accounts for roughly one-third of all U.S. oil production and roughly 46 percent of all U.S. shale oil production. The Permian accounts for about 16 percent of total natural gas production from shale, making it the second largest producing natural gas shale region in the United States behind only the Appalachian Basin.
As of mid-December 2018, the Permian accounted for 486 of the 1,045 total onshore rigs in the United States, according to Baker Hughes. More impressively, the Permian saw an increase of 89 rigs between the second week of December 2017 and the same week in December 2018. At the same time, the United States saw an increase of 136 onshore rigs year-over-year.
one-third of all u.s. oil production
14% of all u.s. natural gas production
65% of total u.s. onshore drilling rig growth from 2017-2018
massive production growth in the permian equals massive economic benefits
The Permian is a key driver of Texas’ economy, with development in West Texas spurring economic growth regionally and statewide. In March 2018 it was reported that Midland, Tex., had the state’s lowest unemployment rate at 2.4 percent. Since then, the unemployment rate has dropped even further and stayed between 2.1 and 2.2 percent from May to October 2018, according to the latest data from the U.S. Bureau of Labor Statistics.
Total employment in the Permian Basin since the beginning of 2011 has increased 46 percent, growing from roughly 126,000 jobs to 184,100 jobs, according to the Federal Reserve Bank of Dallas. Further, unemployment in the Permian declined from roughly 8.5 percent to just above 2 percent during this time period. The Permian cities of Odessa and Midland saw employment increase by 20.8 percent and 37.6 percent – more than twice the state rate – from 2007 to 2018.
Recent data from Realtor.com show Midland, Texas – located in the heart of the Permian Basin – maintained its position as the hottest housing market in the country in November 2018, and neighboring Odessa ranked fourth.
Additionally, home sales and prices in the Permian have hit record highs, growing significantly between 2009 and 2018. According to Federal Reserve Bank of Dallas data, six-month moving average home prices in the Permian rose from roughly $205,000 at the beginning of 2009 to about $289,000 in September 2018. Sales have grown from an average of just over 250 to over 350 home sales per month over this same period.
America’s most prolific oil and gas basin – the Permian – has brought tremendous opportunities to the Lone Star State, including supplying the fuel needed for a manufacturing renaissance. And with record-breaking production projected to increase, the Permian Basin will ensure America’s role as an energy superpower for years to come.