Major questions about major oil, gas find in Texas

Friday, September 9, 2016
 | 
Chris Woodward (OneNewsNow.com)

oil refineryThe Houston-based Apache Corp. oil and gas company believes that there could be 3 billion barrels of oil and 75 trillion cubic feet of natural gas in an area it calls Alpine High in West Texas, but it remains to be seen when consumers will actually benefit from the find.

The company announced its discovery on Wednesday after two years of drilling in the region, which includes largely undeveloped territory in Reeves County.

Apache Corp. CEO John Christmann believes the extent of the find won’t be uncovered for some time.

"It is a world-class resource play," Christmann explained at conference in New York. "This really is a giant onion that is going to take us years and years to peel back and uncover."

Tom Pyle of the Institute for Energy Research agrees that Apache has struck it big, which continues to be more evident day by day, but he maintains that the economics and geography pose a challenge.

"Everyone said that we were running out of this stuff and now we just keep finding more and more and more and more," Pyle told OneNewsNow. "That's sort of what they're going to have to figure out going forward, is when it makes sense to go after this stuff and how to do it."

Discouragement from the outside

Giving their take on when they believe it makes sense to go after it, some individuals, think tanks and special interest groups feel as though oil and gas companies may not see these things as worth the effort – given today's low oil prices.

Similar skepticism was voiced against TransCanada and its overall Keystone XL project.

"[They're] absolutely interested," says Pyle. "You can't operate a business at a loss [because] if you do, you'll go out of business and that's sort of the magic of the markets."

When prices are high, Pyle explains that there are a lot of folks who are chasing oil and gas resources. He insists that eventually, those investments bear fruit over time and more production results so consumers see relief at the pump.

"Optimally, when the price is just right, there's incentive to produce more oil and gas, and the prices are not over-burdensome for us – the motorist, the consumer,” Pyle continued. “And that's kind of always the nature of the game, [which] is how does the industry do more with less, be more efficient, learn through technology … how to get this oil out at a lower price point and be able to compete globally because it is a global market."

The energy expert then elaborated on the timetable of getting the oil and gas to the market.

"Every drilling rig – every drilling operation – is kind of like a unique painting," Pyle informed. "Shale production is not as expensive – or as time consuming – as, say, deep-water offshore [drilling], so, it could come online faster. But as the CEO of Apache said, they have some challenges ahead – both from an economic perspective and some of the geographic conditions of the find."

He argues that bottom line is that the U.S. is "swimming in oil and gas."

"We can and should be the world's leading producer of these resources – and the world's leading exporter of these resources," Pyle concludes. "We need government policies in place that embrace that notion, as opposed to the exact opposite, which we've been dealing with for the last eight years."

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