How a ‘Monster’ Texas Oil Field Made the U.S. a Star in the World Market
MIDLAND, Tex. — In a global collapse of oil prices five years ago, scores of American oil companies went bankrupt. But one field withstood the onslaught, and even thrived: the Permian Basin, straddling Texas and New Mexico.
A combination of technical innovation, aggressive investing and copious layers of oil-rich shale have transformed the Permian, once considered a worn-out patch, into the world’s second-most-productive oil field.
And this transformation has apparently inoculated Texas against its traditional economic enemy, the boom-and-bust cycle pegged to oil prices.
Even now, with prices still far below their peak, the Permian is bursting with production and exploration, and the biggest concern is how to create more capacity to get all that oil to market.
The shale-drilling frenzy in the Permian has enabled the United States not only to reduce crude-oil imports, but even to become a major exporter for the first time in half a century. Its bounty has also empowered the United States diplomatically, allowing it to impose sanctions on Iran and Venezuela without worrying much about increasing gasoline prices.