The Daily Update - Permian Basin Pressures

In a bid to ease the pressure on New Mexico and West Texas’s infrastructure, education and healthcare systems, caused by the boom in shale gas and oil production in the Permian Basin, more than 15 energy companies have pledged USD100m to the local economies. Among the energy companies involved, Royal Dutch Shell, Exxon Mobil and Chevron will help back a consortium called the Permian Strategic Partnership. USD100m sounds like a big number, however, when you consider the Permian Basin covers approximately 75,000 square miles (the whole of the UK is 93,500 square miles) the number may/will need to grow.

The Partnership aims to alleviate some of the strain that the local economies have had to endure due to energy companies wanting a piece of the action in the US’s largest oilfield. Former U.S. government official and energy executive, Don Evans, who lives in Texas and sees the problems first-hand is helping launch the group. By the end of this year energy companies are expected to pump 3.7 million barrels of oil per day in the region, more than four times the rate they were pumping less than a decade ago. Whilst this has helped some sections of the economy, restaurants, hotels, supermarkets etc, and driven down the unemployment to a little over half the national average, there have been some obvious and less obvious side effects.

The obvious side effects of school and hospital overcrowding go hand in hand with the less obvious ones like drug abuse, traffic fatalities and even strains on the power grid. The consortium aims to work in partnership with various groups, officials and companies in the region to try to help reduce the pressure on the local economy, with the promise that ‘everyone will have a voice’. As Evans put it ‘It’s a significant amount of money, but these are huge challenges’ adding ‘We don’t have enough teachers. We don’t have enough doctors’. As stated, it’s a significant amount of money, however, if growth in the area continues at the same pace as the last decade, the energy companies will have to dig a little deeper into their pockets.

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