- [Narrator] This is a map
of known sediment basins
in the United States.
Many of these regions hold deposits
of natural gas and crude oil.
Now, this map compares how much
crude oil each basin holds.
Of the many formations
scattered across the country,
one reigns supreme.
- With our new estimates
of the Permian Basin,
that resource estimate is on par with
what it's been estimated
in the Middle East.
- [Narrator] The first
oil well was drilled
in the Permian Basin
of Texas and New Mexico
roughly a century ago, and
now the Basin produces more
than four million barrels of
crude oil on a daily basis.
Surging Permian production
has helped to make the US
the top oil producer in the world.
That growth hasn't come
without challenges.
Let's unravel how this strip of desert
propelled America's ascent
to crude oil superpower.
The Permian Basin's first
commercial operations began
at Mitchell County in Big Lake, Texas.
The region's resources
soon proved critical.
Data collected in the 20th century
show wells in the Permian yielding
10 to 22% of national
crude oil production.
That oil was key in moments
of international conflict.
Crude was a key commodity in World War II.
Refined fuels stemming from the Gulf Coast
powered engines and
aided in the manufacture
of everything from roads
to uniforms and bombs,
and during the global oil crisis of 1973,
oil from the Permian
helped stabilize US markets
as OPEC nations cut supply in an embargo.
For years, there was steady
growth in the region,
but following the 1970s energy
crisis, oil prices dropped
and drilling became far less profitable.
Production dwindled.
Meanwhile, new extraction
methods developed incrementally.
Hydraulic fracturing,
also known as fracking,
was invented in the late 1940s,
but decades would pass
before it was used widely.
In the modern version of
this process, producers drill
through several layers
of the Earth's crust.
Then, they blast a mixture
of water, sand and chemicals
through the rock at a high pressure.
This fractures the rock and
unlocks oil from the crust.
For many years, producers used fracking
to maximize production from
conventional resources,
large reservoirs of crude oil
that were easy to draw to the surface.
But, a breakthrough in
the nearby Barnett Shale
unlocked vast new reserves
in shale rock formations.
In 1998, an engineer at Mitchell Energy
used a dramatically higher ratio of water
to chemicals and sand to
blast through sediment.
The new method made it
possible to extract resources
that weren't previously
commercially viable.
While fracking helped producers
recover every drop possible,
new drilling technologies
expanded their reach
especially horizontal drilling.
It became common in the
Permian in the 2000s.
The advent of horizontal drilling meant
that producers could
target multiple formations
from a single site at the surface.
These wells can sometimes
stretch for miles.
Fracking and horizontal drilling
are particularly effective
for the Basin's geology.
The Permian's Western
subbasin, the Delaware,
has more depth than other
parts according to the USGS.
- Because they are so
thick, industry is able
to put in multiple wells
within that stack of units
and drill multiple
horizons to produce oil,
and that is really what's
unique about that area.
- [Narrator] The Permian
has significant deposits
of shale rock, and the
combination of fracking
and horizontal drilling in the 2000s
made the tight oil in shale recoverable.
This combination set the
stage for the shale revolution
which picked up steam in the 2010s.
This put the Basin at the center
of a crude oil renaissance in America.
The national production rate,
which had dwindled for
decades, mounted a turnaround.
Since the mid-aughts, the
national crude production rate
has mostly climbed upward on
the strength of the Permian
save for a short decline
that began in 2015.
The year prior, US crude
prices plunged 50%.
Many producers in the Basin
scaled back production
to prevent further losses, but
the producers that survived
were in position to drive
the Permian to new heights.
Moving ahead to 2018, the
United States surpassed
Saudi Arabia and Russia to
become the world's leading
oil producer, but this production
brought new challenges.
First is the issue of well placement.
Here's an oil field outside
of Odessa, Texas in 2003.
By 2018, these fields were
brimming with well pads.
That can put a damper on production rates.
- Producers in recent years
have tried to space wells
more closely together to maximize
the amount of oil and gas
that they are able to
get out of their acreage.
They found, in some instances, that
that hurts the output of individual wells.
Producers are kind of
going back and increasing
the distance between the
wells that they drill.
The result is that they
have fewer overall locations
to drill the acreage that they have.
- [Narrator] And the
problems don't end there.
The pipelines that run through the Permian
have had a capacity issue.
In recent years, oil
production in the Permian
has increased faster
than pipeline capacity
leading to bottlenecks
and discounted prices,
and when capacity isn't sufficient,
producers are instead left
to transport resources
by rail or truck, or they
have to slow down production.
New pipelines are scheduled
to come on line in late 2019
which could help
alleviate price discounts.
But, the energy producers
in the Permian can't escape
their fraught connection to
the climate and environment.
Consider the issue of flaring.
The natural gas flowing from the Permian
is mostly a byproduct.
When producers drill for oil,
they also unearth natural
gas which is less profitable.
Facing limited profitability
and pipeline capacity issues,
many drillers choose to
burn their fuel onsite.
Flaring in the Permian
is at all-time highs
according to Rystad Energy.
- That's a concern, first of all,
because it's a colossal waste of energy,
but more so, they can cause
local air quality issues
if they're not burning properly,
and we're releasing a
bunch of greenhouse gas
into the air as carbon
dioxide that we're wasting,
so flaring benefits nobody.
The only thing that it's better than is
releasing the methane
into the air directly.
- [Narrator] The string of
boom towns and man camps
along the Permian Basin represent
the heartbeat of American energy.
All eyes are on the
region as the US fights
to maintain its position
atop global oil markets.
(orchestral music)
