Last week, the USGS announced its biggest gas and oil discovery in the US ever, in Texas. The implications of this discovery are potentially dramatic since the US now also has a new president who is a climate change denier.
Reports claim that there will be 20 billion barrels of oil, which is enough to power the US entirely for one year. The discovery was revealed in a place that has been drilled before using more conventional oil obtaining methods and President Trump’s attitude encourages controversial fracking. If the new discovery could be kept on the ground, it would mean positive news for the environment on two counts: we cannot access the new resources without contributing to climate change and also drilling the area will change the habitat of one of Texas’ most valued landscapes. Ultimately, President Trump’s general attitude to climate change dictates that he will likely proceed with the extraction, which experts are suggesting will also uncover further fields in years to come.
Cost of oil
Figures suggest the find is worth $900 billion, although this is the raw price, without considering the cleaning and refining expenditure and the cost of fracking the area. Currently, oil barrels in the US are costing an average of $46, which is how the calculation of $900 billion has been come to. The discovery should lead to a reduction in oil prices since there is so much more availability. In North Dakota, a large discovery as such has driven their economy, providing jobs in the local area and reducing the cost of oil. Texans will likely be celebrating the discovery since it will provide a stable economy for the state and many more jobs. Additionally, the Wolfcamp discovery and the huge output of resources from it should have a positive impact on the US’s independence, making it a more self-sufficient country. “Changes in technology and industry practices can have significant effects on what resources are technically recoverable, and that’s why we continue to perform resource assessments throughout the United States and the world,” said Walter Guidroz, a program coordinator for the USGS Energy Resources Program, in the USGS statement. “Even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” he said.
If the digging goes ahead, it will be dependent on fuel prices having risen to around $65 per barrel in order to make it the most financially viable.
The international markets went berserk following Trump’s election and the price of oil has fluctuated in the last year. The implementing of drilling in the Wolfcamp Shale site would potentially make the US more fuel independent, which could have an interesting bearing on international relations. It would make the relationship with the Middle East more interesting since they are the main competitor for oil. Those considering investing in oil stocks would benefit from testing a trading platform to see how they operate, gaining confidence in making an investment work to achieve the highest yield.