The Permian Basin is located in Texas and New Mexico, and is the United State’s most prolific oil producing area. In all, six formation within the basin have been the driving force behind the Permians 60% increase in production since 2007. The area went from an all-time low point in production of 850,000 barrels per day in 2007 to 1,350,000 barrels per day in 2013. Because of this massive growth, the Permian Basin actually outproduces the federal drilling operations in the Gulf of Mexico, making it the single biggest crude oil producing region in the United States.
In total, the Permian Basin stretches across an area that is 300 miles long and 250 miles wide. Almost three quarters of the recent increase come from three formations: the Spraberry, Wolfcamp, and Bone Spring which stretch from south of Lubbock, Texas to just south of Odessa. Oil production in the area has traditionally come from more permeable areas in the formation, but the recent advent of hydraulic fracturing and horizontal drilling has made harvesting the less permeable portions more viable for commercial production. Companies that have taken advantage of these technological advancements and established a heavy presence in the Permian Basin include OXY USA Inc, Sunoco, Chevron, Kinder Morgan, Apache/Mariner and Cog Operating LLC
From an economic standpoint, the Permian Basin has been incredibly beneficial to the counties in which companies operate as well as the state of Texas as a whole. The oil and industries contributed $8.5 billion in local and state taxes in 2009 alone. The oil and gas industries don’t just produce jobs, they produce high-quality, high paying jobs. The average worker in the industry earns around $107,000 per year, as opposed the average private sector where the median income is $44,000 per year. More importantly, many of these jobs produced naturally create other jobs throughout the economy in a sort of domino effect. According to some estimates, there are 17 manufacturing jobs created for every job in oil and gas. That’s because of the purchases that every oil and gas company has to make such as pipes, machinery, raw materials, fuel, steel, concrete, legal services electricity…the list goes on and on. Oil and gas companies are big business and the millions of dollars they spend goes right back into the local economy.