Pipeline constraints costly for Permian Basin producers

Fuel Fix:

Upwards of $1.4 billion in completions of oil and gas wells in West Texas' Permian Basin could be delayed or reallocated to other shale plays through 2019 due to pipeline constraints, a new report says.

The completion reduction is linked to the tightening of outbound pipeline capacity in the Permian Basin, which has been filling up throughout 2018 as production in the booming oil field continues to grow.

The report was compiled by Westwood Global Energy Group, a London-based global energy consultancy firm, using data from Energent Group.

The Westwood report said that from the third quarter of 2018, which began July 1, through the end of 2019, 345 wells will not be completed. Also known as drilled but uncompleted or DUC wells, oil and gas companies have drilled the wells but have not hydraulically fractured, or fracked, them to begin producing oil and gas.

The Department of Energy estimated that in July 2018 there were 3,470 such DUC wells in the Permian Basin, the largest number of any oil and gas shale play in the country. That figure is 79.6 percent higher than the 1,932 DUC wells recorded in July 2017.
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One of the major reasons for the delay was the lack of a quorum at FERC to approve deals in the latter days of the Obama administration and early days of the Trump administration.  Getting this oil out of the ground is a high priority for the Trump administration which has a goal of energy dominance.  The anti-energy left has been trying to impede the growth in fossil fuels in favor of their less efficient and less reliable alternative energy such as wind and solar.

There is also a shortage of truck drivers for carrying the fracking sand to the wells and other aspects of operation in the oil fields.  It is estimated that Texas alone needs 50,000 more truck drivers.