US Oil & Gas Reserves Increase
Rumors of the demise of the oil and gas industry are greatly exaggerated. In fact, two new finds in the US, Alaska & Texas, have now suggested that the price of oil will remain low for the foreseeable future. In fact, these finds will make the US more energy independent while also creating continued growth in exports and billions of dollars in new economic activity.
The new finds will solidify the leadership of the United States in hydrocarbon production. While additional testing is yet to be completed, these discoveries will increase utilization of the Alaska pipeline while also sustaining the state's oil market and the associated economic benefit.
The discovery has "the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades," Caelus COO Jim Musselman said in a statement on the company's website. Oil production in Alaska has been on the decline, although oil and gas still account for an estimated 90 percent of the state's revenue. Musselman credits state tax credit programs for enabling the discovery.
The find in Texas also continues to put that state in the lead of US oil and gas production where state policies encourage exploration and production. An overlooked corner of West Texas is believed to contain billions of barrels of newly-discovered shale oil. Energy company, Apache, (APA) revealed the huge find this week after more than two years of stealthily buying up land, extensive geological research and rigorous testing. The Houston company estimates the discovery, dubbed "Alpine High," could be worth at least $8 billion. Apache believes the new shale play spans at least five formations, contains over three billion barrels of oil and 75 trillion cubic feet of rich natural gas. "We feel very confident with what we have and believe this is a story that's only going to get better" stated Apache CEO John Christmann.
Although actual drilling has been delayed due the current low prices of oil and gas, the market ultimately expects demand to increase in the next two to three years resulting in a climb back in prices. These new discoveries, along with current production, bode well for the US energy market. As oil prices increase and drilling resumes, water resources will continue to be a major issue facing producers. The need for the treatment of frack and produced water will drive demand for remediation technologies globally. Those technologies that can efficiently clean and reuse this precious resource will be well positioned to take advantage of this growth while also responding to the needs of the industry.