Dispatch From The Permian Basin
Yesterday a colleague and I drove ten hours from Phoenix to the heart of the Permian Basin. We had to deliver some equipment to an oil production site there. In fact, I am writing this account from this tiny trailer on an oil well pad of a small, publicly traded oil company:
My Office For The Week
Incidentally, just to the right in the background is a truck used for hauling fracking sand.
Anyway, we arrived at our hotel in Fort Stockton at 11 p.m., only to find that the parking lot was full. The vehicles in the parking lot represented every type of oilfield-related business imaginable.
Inside, I found out that the hotel had overbooked us, and we had to find another hotel in a town that was booked solid. After an hour of searching, we finally located a pair of the last rooms in town. The carpet in my room smelled like crude oil, but I was happy to have a bed for the night.
That’s the way it goes in the Permian these days. It’s been two years since I was last here, but it is booming as never before. In fact, I heard someone say that if you can’t make money in the Permian right now, you aren’t trying.
That’s what brought me here. My company works with oil and gas companies to mitigate oilfield flaring. Because there is a lot of new drilling here right now, the region is oversupplied with natural gas.
As a result, oil producers may prefer to flare natural gas because of the low market value in this area. My company treats and converts gas that might otherwise be flared into power that can be used onsite.
Just to give you a visual, I can see flares from where I sit in my trailer. To my right is a natural gas well. Actually, I will run out and show you:
Me Scowling At A Permian Basin Natural Gas Well
In front of me is an oil well, and behind me is a line of trucks filled with sand for a well that is currently being fracked.
A Century of Production
The Permian Basin remains my favorite oil play in the world. Amazingly, the Permian is approaching its 100th year of oil production. At present, production has reached 2.8 million barrels per day (BPD), making it the most prolific oil field in the country.
Since 2012, Permian Basin production has increased by nearly 2 million BPD – which is a larger increase than any other oilfield in the world. Permian Basin production even continued to increase from 2014 to 2016, when production fell in all of the other major oil-production regions of the country.
It’s a cold, windy, and desolate place — and it’s making a lot of people very wealthy. If you aren’t making money here, you aren’t trying. Or so I have heard.