Texas has never been lacking when it comes to great energy plays discovered within its boundaries. One of the greatest shale plays is the Barnett shale, which covers more than 5,000 square miles of the Lone Star State. Another is the Eagle Ford, which spans nearly 20,000 square miles in southern Texas.
"These plays did great things for the state and great things for the local economies, as well as great things for the nation," said Timothy Dove, president and CEO of Pioneer Natural Resources.
But the opportunities made possible by the vast shale play that is the Permian Basin are unprecedented.
"The easiest way to capture it is to look at the aerial extent of the field. It is 90,000 square miles. Look at that in combination with the depth and the size of the shales in most other areas, and you can understand the extent of this opportunity," Dove said, addressing delegates at CERAWeek by IHS Markit, held recently in Houston.
"What we are staring at below our feet in the Permian Basin cannot be replicated anywhere in the United States," he said. "That is a given."
Sara Ortwein, president of XTO Energy, agreed with Dove regarding the Permian's awe-inducing potential.
"From an export standpoint, I think the Permian and liquids production in the tight formations have completely changed the game," she said on a panel titled "North American Oil: The Supply Disrupter."
"Export will be a key component," Ortwein added.
Regarding infrastructure development, Ortwein said the takeaway capacity for gas, NGL and crude is of utmost importance in terms of capturing the Permian Basin's potential.
"We are expanding our Gulf Coast chemical capacity but are also looking to take some of that Permian production to the export arena as well," Ortwein reiterated. "But infrastructure is going to be key. We see growth by 2030 of about 16 billion cubic feet a day of gas, which is going to take a number of new lines for gas."
NGL's takeaway capacity is "probably OK" through about 2025, Ortwein said.
"For crude, we would estimate there's probably growth of about 5 billion barrels a day or more of capacity, and that's going to take new crude lines coming out of the region as well, to be able to get to the Gulf Coast or export markets," Ortwein said. "So the potential is there, clearly, for export to Mexico and other places."
Holistic approach to carbon footprint
Mark Little, COO of Suncor Energy, agreed the carbon footprint left by oil sands and pipelines that transmit product are under scrutiny.
"Yes, carbon is an issue," Little said. "We are developing a lot of this resource right in the backyard of our First Nations, and they are also concerned about water usage, land reclamation and those sorts of things."
Little said Suncor is trying to look at the issue holistically by introducing projects like the company's Fort Hills project.
"We are literally going in and altering the carbon content of the barrel so when we ship it to market, it has a different carbon footprint than it would if we just produced the barrel and shipped it to market," he said. "As a result of that, we are taking it on a full-cycle basis -- wells to wheels. That barrel is now landing and getting used, and it's basically in line with the average carbon footprint of the barrel that's being run in U.S. refining today.
"This is a massive resource. It fundamentally changes the whole story about oil sands."
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