magazine

By Paul Adair
In terms of oil and gas production,
much of the nation’s recent focus
has been on the Bakken—and
rightly so. The Bakken Formation
is massive, both in terms of size
and economic potential. A rock unit from
the Late Devonian to Early Mississippian
age, the Bakken occupies approximately
200,000 square miles of the subsurface of
the Williston Basin, underlying sections
of Montana and North Dakota, as well as
north of the American/Canadian border
into Manitoba and Saskatchewan.
In early 2008, the United States Geological
Survey used the technology readily
available at the time to estimate the
amount of recoverable oil in the Bakken
Formation, and came up with a number
of approximately 3.0 to 4.3 billion barrels,
with a mean of 3.65 billion. Last year, the
United States Geological Survey released
new numbers estimating an expected recovery
of around 7.4 billion barrels of oil,
reflecting the improvements in extraction
technology.
There has been a boom in Bakken production
since 2000, when hydraulic fracturing
and horizontal drilling technologies
were first being applied to the region.
Ten years later, oil production rates had
reached almost half-a-million barrels per
day, outpacing the pipeline capacity to
ship oil out of the Bakken.
On the other hand, this sudden increase
in production has also brought a
number of challenges to the region; challenges
related to the subsequent growth in
the communities that make up the heart
of the Bakken, such as rising house prices,
stresses to municipal infrastructure and
substantial damage to North Dakota’s
roads and highway systems. That being
said, most would agree that the positives
gained because of the boom far outweigh
the negatives. However, with this much
attention being paid to the Bakken Formation,
many Americans have missed the
meteoric rise of its smaller southern—and,
potentially richer—cousin from Texas: the
Eagle Ford Shale (EFS).
Texas tea
Only five years ago, few were talking
about the EFS discovered in La Salle
County by Petrohawk, however, with activity
ramping up in 2010, the EFS can be
now considered one of the largest oilfields
in the nation and, based on invested capital,
can be ranked as one of the largest oil
and gas developments in the world.
With almost 250 active wells, the EFS
encompasses 14 counties, all of which are
currently booming. Additionally, six other
counties along the periphery are being indirectly
impacted by the EFS, including
Uvalde, Victoria, Jim Wells, Nueces, San
Patricio and Bexar.
Approximately 20,000 square miles of
the Eagle Ford Formation resides within
the United States, along with a sizable
portion of the formation dipping further
south into Mexico, and, despite its somewhat
smaller size when placed beside the
burgeoning Bakken, the potential of recoverable
oil is substantially greater. Whereas
the Bakken is comprised primarily of oil
and gas commodity, the EFS is often referred
to by experts as being a ‘triple play’,
meaning it is rich in oil, gas and condensate,
which is obtained after the transition
of a gaseous substance into a liquid state
due to a drop in pressure or temperature.
Additionally, the EFS is expected to have
seven to 10 billion barrels of recoverable
oil available to be extracted, while the
Bakken is estimated to have around four
to seven billion barrels of recoverable oil.
In 2013, almost $30 billion was spent
developing the EFS play, and there were
an estimated 116,000 jobs supported in
the EFS, which, in turn, helped to provide
more than $60 billion to the local Texan
economy. Studies conducted by the University
of Texas at San Antonio project that
by 2022 the region will be able to support
upward of 127,000 jobs and produce an
economic impact of approximately $89
billion for the state of Texas.
At present, there is approximately $100
billion in planned projects along the Gulf
Coast to better reap the rewards of this rich
formation. Counties are witnessing heavy
investment in crude oil, natural gas and
natural gas liquids (NGL) gathering and
transmission pipelines; natural gas processing
plants; fractional capacity projects; ethane,
propane and related projects; rubber,
fertilizer and export projects; and crude/
condensate terminal storage projects, all of
which will only improve the economic outlook
of communities in the EFS.
Dealing with
unprecedented growth
However, the 20 counties situated in
and around the EFS are also experiencing
the negatives associated with expansion resulting
from the development of this vast
energy potential. If the Bakken can be held
up as a model for unbridled growth during
The Eagle Ford Shale play extends 20,000 square
miles and dips south of the border into Mexico.
The development of the Mexican side of the
EFS is critical for Mexico.
Production activity of the EFS in the United
States and Mexico.
an oil boom, these counties are expected
to bear the brunt of the region’s unprecedented
growth for years to come.
“I can say that most shale developments
will experience the same challenges
and opportunities,” says Gil Gonzalez, director
of the Rural Business Program and
the University of Texas at San Antonio. “It
begins with rapid growth at the primarily
rural communities in the upstream,
BASIN BITS | Spring 2014 49