Houston Chronicle: Permian Basin economy could thrive for years to come as oil industry modernizes
Permian Basin oil producers are becoming so technologically efficient that local communities may no longer endure dramatic boom-and-bust fluctuations in the industry, but rather decades of economic stability and community investments, according to a report in the Houston Chronicle.
While rising demand for oil typically brings new jobs and wealth to the Permian Basin, inevitable drops in prices historically prompted workforce reductions, leading to families moving out of the region. But there is evidence in the current market that such dramatic economic changes may not happen due, in part, to technological advancements that enable companies to tap more oil less expensively, the Chronicle reported.
“The current boom, according to longtime residents, Midland officials and companies in the region, is more muted, with incremental advancements in drilling technology and the world’s appetite for oil driving long-term investments,” the newspaper stated. “And that, experts say, could lead to more stability in rural communities accustomed to dramatic boom and bust cycles.”
Cited as an example of a technologically advancing industry is Chevron, which holds over two million acres in the Permian Basin. A control center in Houston monitors all of Chevron’s active drill sites, allowing the company to maintain a smaller but more stable level of workers at those sites and to quickly share data and information that can help make operations more productive.
“If one rig learns how to do something, to drill five feet longer in 30 less minutes, that’s passed to all of the rigs. It’s built into the system,” Ryder Booth, leader of Chevron’s Mid-Continent business unit in Midland, told the Chronicle.
Stability into the future will mean a steady influx of investment into Permian Basin communities. The Chronicle noted the formation in 2019 of the Permian Strategic Partnership, which consists of 17 energy companies working with local governments and foundations on ways to steer community investments. Thus far, over $100 million has been invested via the partnership.
To read the Chronicle’s full report, go here.