Steel Products Prices North America
Cline Shale in Texas May be Next Oil Boom
Written by Sandy Williams
July 19, 2014
The next shale oil and gas boom could be in Texas according to the estimates of volume of recoverable oil in the Cline Shale formation.
More than 30 billion barrels of recoverable oil lie underground in Cline Shale according to studies by Devon Energy and Chesapeake Energy. It is estimated there are approximately 3.6 million barrels of recoverable oil per square mile. At 9800 square miles the potential total could be as high as 35 billion barrels. That total is 50 percent larger than the combined shale plays of Eagle Ford in Texas and the Bakken in North Dakota. The numbers have been questioned by some who feel that the data is too optimistic, but there is no doubt that there is potential for high oil production in the Cline Shale region.
The Cline formation is at a depth of 9000 -11,000 feet, is 250 feet thick and covers 1 million acres and a dozen Texas counties. It is located in the Permian Basin which is currently home to six formations that the U.S. Energy Information Administration keeps track of.
According to EIA data, oil production in the Permian Basin increased from 850,000 barrels per day to 1,360,000 barrels per day in 2013, making it the highest crude oil producing region in the U.S., exceeding offshore production in the Gulf of Mexico. In July 2014, the Permian Basin produced 1.6 million barrels of oil per day. Beginning in 2013 through May 9, 2014, the horizontal rig count rose by 63 rigs, a 50 percent of the total increase in the U.S.
Development of the Cline Shale region is expected to bring economic benefits to the area including housing, commercial and retail development. In a study by the University of Texas San Antonio, paid for by the West Texas Energy Consortium, it is estimated that the oil and gas industry had a $14.5 billion impact on the region in 2012 and supported 21,450 jobs. By 2020, a moderate estimate of the impact of oil and gas production is expected to increase jobs to 30,540 and economic revenue to $20.5 billion, with $664 million going to local government coffers.
Sandy Williams
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