Oilfield operations in the Permian Basin of Texas, Louisiana, Arkansas, Nebraska and Colorado are expected to slow this year, according to industry experts. Fracking of oil wells in the U.S. was halted in June due to lower oil production and skyrocketing prices, forcing drillers to focus on wells in the Permian basin. In addition, many northern producers stopped their operations in October because of warmer-than-normal temperatures in the region. As a result, wells in the U.S. shale plays continue to decline in production.
The Permian Basin is a geothermal-rich area of mountains and grasslands in the central Texas basin that produces about half of the nation’s natural gas and petroleum. In response to the dwindling numbers of wells being drilled in the Permian basin, industry analysts expect production to decrease by up to 15%. Meanwhile, new natural gas markets have sprung up in response to the low prices spurring development in the Permian shale, resulting in an influx of investment capital and higher prices for natural gas.
Drilling rigs in the Permian basin are still active, but activity has declined significantly since the drilling boom commenced in the 1970s. A new study from the University of California-Davis Center for Water Resources Research sheds more light on why. In a paper published online in the journal Science, researchers used data from the USGS to pinpoint where recent earthquakes in Texas and Oklahoma may have resulted from hydraulic fracking. The study used ground monitoring equipment to analyze the activity around three known major fault lines in the region. It found evidence that hydraulic fracking may be responsible for the earthquakes in the West Texas, Wharton County in southern Texas, and El Dorado County near Lubbock.
According to the new study, a decline in rig count is one of several factors that could have led to the increase in seismic activity last year. Rig counts in the Permian basin are down from an average of five rigs in the early part of the last decade to just one rig last year. This decline is likely tied to increasing pressure from environmental groups pushing for more regulations on the amount of water and wastewater released into the aquifer.
Other studies have shown increasing levels of carbon dioxide in the atmosphere due to global warming. One study published in Nature Geoscience suggests that this phenomenon may be tied to the rise in oilfield emissions. Oilfield emissions comprise about 30% of the carbon dioxide released in the atmosphere, according to the Environmental Protection Agency. Another study indicates that it is technically feasible to recover much of the natural gas and crude oil production currently available through hydraulic fracturing.
Fracking involves injecting high-pressure liquids under high pressure to connect pores in rocks that cannot be accessed using standard drilling methods. The goal is to reach a layer of rock that contains oil or natural gas within the earth’s crust. This oilfield activity has been linked to an increase in water extraction costs, but new Mexico government officials said that the economic development benefits of the practice far outweigh any such concerns. “There’s an abundant supply of this gas, “said Alejandra Delgado, director of mineral exploration at Grupo Biodiesel, one of the world’s largest fertilizers and biodegradable chemicals companies. “The investment in the oilfield is going to return immeasurable benefits to all of us.”
Drilling for oil in shale fields in the United States has been a key factor in rising oil prices over the past few years. In the new Mexico, the rising price of oil is already being reflected in the cost of the national oil supplies. According to reports, new federal regulations are expected to further increase costs to drill for and extract petroleum from shale fields in the united states.
New Mexico’s dependence on federal funding is the reason why the state’s oilfield development officials have been so reluctant to explore for and develop more oil within the boundaries of the state. The lack of available drilling locations and a shortage of quality equipment is hindering efforts by the state’s oilfield and drilling professionals to find more oil. Oilfield executives are optimistic though and believe that eventually the rush to find more oil will begin to subside. In the meantime, they have proposed a number of innovative solutions to the problem of finding more oil in the Permian basin.