Evans: ‘The future has never been brighter’
Tue, September 22, 2020
For all the riches the Permian Basin’s oil and natural gas resources has generated since the first discovery in Mitchell County 100 years ago, there’s more to come.
Last week, the Permian Strategic Partnership issued a report quantifying those opportunities, finding that the Permian contains more than 92 billion barrels of oil in proven reserves and enough natural gas to meet the nation’s household needs for 60 years.
“It’s an incredible story that I think goes untold,” Don Evans, who serves as partnership chairman, told the Reporter-Telegram by telephone. “Few people understand the role we play in economic security, energy security, and in the national security of the United States.”
The former secretary of Commerce during President George W. Bush’s first term said the partnership is serving as a trusted voiced, promoting investment in the Permian while also serving as a voice for the broader Permian Basin.
“For any industry or any institution or organization, what’s important is having a trusted voice,” Evans said. “We represent that trusted voice for the energy industry and the Permian Basin.”
While the New Mexico portion of the Permian contains only 6.1 percent of the state’s population and the West Texas portion of the Permian Basin 1.8 percent of Texas’ population, the region is responsible for 18.31 percent of New Mexico’s gross domestic product and 10.89 percent of the Texas GDP.
To realize the Permian’s potential, Evans said investment in the region’s schools, housing and infrastructure like roads and broadband is needed. The report said $1 billion invested in local roads would prevent more than 4,000 traffic accidents and almost 200 fatalities.
It’s a remarkable story, he said, given that around the end of 2008, the Permian Basin was projected to be producing a mere 500,000 barrels a day.
“We know what happened,” he said. “Thanks to the innovation, entrepreneurial, great risk-taking spirit of the industry and citizens in bringing in new technology, the Permian Basin at the end of 2019 was producing 5 million barrels a day. That’s unprecedented.”
He said he likes to tell people that because of the innovative, risk-taking spirit of Permian Basin producers in adapting new technology and new techniques, the price of oil was driven down from $100 a barrel to $50 a barrel and natural gas from $10 per Mcf to $2 per Mcf.
“That’s like a $500 billion tax cut. Instead of $4 per gallon of gasoline, consumers are paying $2 a gallon. That’s an incredible stimulus to the US economy and globally, it’s like a $2 trillion tax cut,” he said.
“And the exciting thing is there’s a lot more to come,” Evans continued. Although the industry and region are going through hard times because of the novel coronavirus COVID-19 pandemic and low commodity prices, he believes the region will make it through those hard times and grow again.
“The future has never been brighter, and all credit goes to the industry and the citizens of the Permian Basin. The patriotic spirit, the hard-working spirit of the Permian Basin makes it possible,” he said.
203,000 industry jobs in Texas
22,000 industry jobs in New Mexico
$2.42 billion towards education in Texas in 2019
$1.52 billion towards education in New Mexico in 2019
10.89 percent of Texas GDP
18.31 percent of New Mexico GDP
If $1 billion were invested in Permian Basin roads:
4,500 fewer fatalities and injuries
2.1 million fewer hours in traffic delays
$1.5 billion in economic benefits from increased safety and fewer delays
$87.2 billion towards education in Texas over next 30 years
$18.5 billion towards education in New Mexico over next 30 years