with agency report
18 November 2018, Sweetcrude, Lagos — Following shale oil boom in the U.S, over twelve top energy companies operating in the country have pledged $100 million towards easing stresses on health care, education and civic infrastructure in West Texas and New Mexico, Reuters reports on Sunday.
Chevron, EOG Resources, Exxon Mobil and Royal Dutch Shell are among 17 companies in the consortium called, Don Evans, a former U.S. government official, and energy executive helping to launch the group told Reuters on Saturday, adding that it was backing the Permian Strategic Partnership.
The group seeks to address labor and housing shortages, overtaxed health care and traffic congestion caused in part by companies descending on the Permian Basin, the nation’s largest oilfield, where they hope to pump billions of dollars’ worth of oil and gas in coming decades, experts said.
“It’s a significant amount of money, but these are huge challenges,” said Evans, a former U.S. Secretary of Commerce who lives in Midland, Texas, the epicenter of the shale oil revolution. “We don’t have enough teachers. We don’t have enough doctors.”
The group aims to work with regional and federal officials, companies, nonprofit groups and educators in New Mexico and Texas, said Evans, who started in the Permian and became CEO of producer Tom Brown Inc before joining the administration of former President George W. Bush.
The group is assembling plans to hold meetings in communities across the region, so “everyone has a voice” in the undertaking. There is no timetable or plan for how the initial contribution will be spent. The group is recruiting staff and searching for office space, he said.
Low production costs had led to a rush in the Permian, and companies are now recruiting more staff and equipment into the oilfield expected to pump 3.7 million barrels of oil per day by December, four times its rate in 2010, according to the U.S. Energy Information Administration.
That boom has local employers, including restaurants and school systems, under pressure from staff leaving for oilfield jobs. Midland’s unemployment rate was 2.1 percent in October, compared to the nation’s 3.7 percent rate.
The last decade’s shale boom also has led to school overcrowding, soaring traffic fatalities, drug abuse and strains on the power grid because of the activity, according to the report.
In the U.S, monthly crude oil production reached a record high in several states. Texas had the highest record level at 4.6 million b/d, followed by North Dakota at 1.3 million b/d.
Other states that had record-high production levels were New Mexico, Oklahoma, Colorado, and West Virginia. Production in the Federal Offshore Gulf of Mexico also hit a record high of 1.9 million b/d.
The Permian region, which is located in western Texas and eastern New Mexico, accounts for about 63% of total Texas crude oil production and 95% of total New Mexico crude oil production. From January 2018 to August 2018, Texas crude oil production increased by 683,000 b/d (15%) and New Mexico production increased by 182,000 b/d (25%).
The growth in Texas and New Mexico since the start of 2018 surpassed EIA’s previous expectations, which assumed that pipeline capacity constraints in the Permian region would dampen production growth in response to the increased differential between the West Texas Intermediate (WTI) crude oil price at Cushing, Oklahoma, and the WTI price at Midland, Texas.
In August 2018, this differential had grown to more than $16 per barrel (b), up from $0.43/b in January. However, industry efficiencies in pipeline utilization and increased trucking and rail transport in the region have allowed crude oil production to continue to grow at a higher rate than EIA expected.
U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA’s latest Petroleum Supply Monthly, up from 10.9 million b/d in July, making it the first time that monthly U.S. production levels surpassed 11 million b/d.
U.S. crude oil production exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world.
Department of Energy’s Energy Information Administration, EIA said last week that the U.S. crude oil output is expected to hit a record 7.94 million barrels per day (bpd) in December.
The United States, Russia, and Saudi Arabia are producing more than 33 million barrels per day, bpd- a third of the world’s oil.