Checking in on the West Texas oil boom

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The Permian Basin and beyond, the lasting impacts

SAN ANGELO, TX – Beginning in 2008 and continuing through about 2014, Texas experienced a modern oil boom due to new exploration and extraction technology and methods.

Since about 2010, with the Eagle Ford Shale and the many fields of the Permian Basin, Texas’ most recent oil boom has been an ongoing background hum in day to day life.

“What that’s done is that has created a ripple effect throughout West Texas,” explained Michael Looney, Vice President of Economic Development for the San Angelo Chamber of Commerce. “San Angelo is very close to the edge, to the eastern shelf of the Permian Basin. It has created a lot of prosperity for a lot of companies.”

Booms, like bubbles are sudden, welcome, profitable and do not last forever. The Permian Basin, as with any resource rich region,  has endured these cycles since the early days of oil exploration and extraction. As the boom slowed, a lesser boom or surge, occurred when congress made the controversial move to lift a four decade old ban on U.S. oil exports.

“So by lifting the oil ban in 2016,” said Looney, “it freed up U.S. producers to sell their product on the global market.” This in turn fueled a demand for jobs in the energy industry and the many support industries surrounding it.

For San Angelo, this meant a spike in new residents, placing pressure on the housing and hotel inventory. It also drove down unemployment in the community, which on the surface, sounds good.

“The phenomenon is a good problem to have, but as I tell people, it’s still a problem,” Looney continued. “In San Angelo for example, we have 2.5% unemployment.”

According to economists, a level of 6% is regarded as healthy. But while that is not as pressing a concern, what is pressing, is that as productivity rises so does the probability of incidents which harm the West Texas environment. Some may wonder if the industry is concerned about that.

“They’re quite concerned actually about preserving the land and taking care of it as much as best they can,” Looney said. “It’s a work zone, and so you have a lot of truck traffic you have a lot of chemicals being used… a lot of water.” Specifically brine water, used for fracking. Companies like Shell, have undertaken projects to develop new ways of protecting and repairing the environment from those risks and following incidents.

Despite the progress made with renewables, and the scientific consensus regarding the global need to cease mainstream reliance on fossil fuels, the federal government is not pushing hard toward a new energy mindset. The Trump administration recently moved to reduce requirements for the remediation of industrial leaks.

However some repeated concerns do surface throughout the West Texas region. Even still, the Permian is prospering and the South Texas Eagle Ford Shale is still in the game. Through a combination of technical innovation and unassailable grit, the U.S. is not retreating from it’s still-fresh status as a major oil producer. The country is still far from energy independent, as the country is still importing oil. Substantially less, according to a Texas Tribune article, than “the high point in 2005,” but still.

Oil prices are still far below their astronomical twin peaks of 1980 and 2008. In a report issued in early 2019 by the Texas Independent Producers and Royalty Owners Association (TIPRO), 2018 was a record for oil production in the state of Texas. In the 2019 State of Energy Report, TIPRO notes that “[2018] oil production in Texas totaled a record 1.54 billion barrels (bbl) in 2018, surpassing a previous record of 1.28 billion bbl set in 1973.” The boom is ongoing.

Despite the progress made with renewables, and the scientific consensus regarding the global need to cease mainstream reliance on fossil fuels, the federal government is not pushing hard toward a new energy mindset. The Trump administration recently moved to reduce requirements for the remediation of industrial leaks.

It is worth noting, according to Michael Looney, that oil refineries are tooling their production less and less towards fuel and more towards plastics and other petroleum based products.

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