American Oil and Gas Reporter - September 2022 - 60

SpecialReport: Permian Powerhouse
And the activity indicators show no
signs of slowing. More than 45% of the
active U.S. rigs are operating in the Permian,
and 40% of all drilling permits issued
in the United States this year are
in West Texas and southeastern New
Mexico. The same holds true for frac
spreads, with the basin accounting for
the lion's share of frac activity. While
strong commodity prices are sparking
increased activity in all U.S. resource
plays, no producing province on the
planet can match the Permian's growth
barrel for barrel.
The EIA reports that U.S. natural gas
pipeline exports from West Texas into
Mexico have been growing, from 0.6
Bcf/d in 2019, to 1.2 Bcf/d in 2021, and
to 1.4 Bcf/d on average from January
through May 2022. The EIA attributed
the growth in natural gas demand, particularly
in Mexico's power and industrial
sectors, as contributing to the expanded
Texas-to-Mexico pipeline exports.
To meet that increasing demand, five
recently announced natural gas pipeline
projects are expected to increase the Permian's
takeaway capacity by a combined
4.18 Bcf/d over the next two years.
The Matterhorn Express Pipeline, a
joint venture among WhiteWater, EnLink
Midstream, Devon Energy Corp. and
MPLX, is a planned 490 mile pipeline
that will be able to transport up to 2.5
Bcf/d of gas from the Waha Hub in
West Texas to Katy, Tx. The pipeline,
which will receive natural gas from upstream
Permian connections and from
direct connections at processing facilities
in the Midland Basin, before connecting
to the Agua Blanca Pipeline, is expected
to enter service in the third quarter of
2024.
Three other projects, Kinder Morgan's
Gulf Coast Express Pipeline Expansion
and Permian Highway Pipeline, and the
Whistler Pipeline Capacity Expansion (a
joint venture of WhiteWater and MPLX),
are scheduled to come on line in the
latter half of 2023. Those three expansions
alone will increase takeaway capacity
from the Permian Basin to South Texas
markets from 1.62 Bcf/d to 7.70 Bcf/d
Meanwhile, the Oasis Pipeline Modernization
Project is under construction
and expected to enter service by the end
of this year. It will optimize Energy
Transfer's existing Oasis Pipeline, providing
an additional 0.06 Bcf/d of Permian
takeaway capacity.
❒
Study Quantifies Many UTPB Benefits
WACO, TX.-A new analysis by The
Perryman Group finds that the educational
opportunities offered by the University
of Texas Permian Basin enhance employment
prospects for students and improve
the regional workforce and economic
development potential. In fulfilling its
primary role, UTPB generates a significant
economic stimulus as well as incremental
tax receipts throughout the area, the study
indicates.
The report says it has summed the economic
benefits of operations, student spending
and visitor spending and estimated
the university's total economic benefits.
Including multiplier effects, the total impact
of UTPB's ongoing operations and related
spending is estimated to be:
· $113.1 million in yearly gross product
and 1,670 jobs in the Odessa metropolitan
statistical area;
· $54.4 million in gross product each
year; and
· 783 jobs in the Midland MSA;
· $177.5 million in gross product
each year; and
· 2,551 jobs in the Permian Basin,
and even larger effects across the state.
Moreover, the analysis continues, recent
and ongoing construction projects at the
university lead to additional estimated
gains in business activity of:
60 THE AMERICAN OIL & GAS REPORTER
· $163.1 million in gross product
and 1,899 job-years of employment in
the Odessa MSA;
· $86.4 million in gross product and
1,001 job-years of employment in the
Midland MSA; and
· $304.4 million in gross product
and 3,705 job-years of employment in
the Permian Basin.
In addition, the study says, research
at UTPB leads to notable gains in business
activity, and many graduates of the university
are working in the area, increasing
the overall capabilities of the regional
labor force and generating substantial
economic activity.
Business activity generates tax revenue,
the report observes, and the economic stimulus
associated with UTPB leads to a notable
increase in tax receipts to the state and local
government entities including cities, counties,
schools and special districts.
The Perryman Group says it estimates
that the annual fiscal benefits of operations,
student spending and visitor spending of
the university total:
· $13.6 million to the state;
· $5.7 million to local governments
in the Odessa area;
· $2.8 million to local governments
in the Midland area; and
· $8.9 million to local governments
across the Permian Basin Region (including
effects within the MSAs).
Moreover, the report continues, recent
and ongoing construction projects generate:
·
$28.9 million to the state;
· $7.9 million to local entities in the
Odessa area;
· $4.2 million to local government
entities in the Midland area; and
· $14.6 million to local entities in
the Permian Basin Region during the
construction process (including effects
in the MSAs).
The economic and fiscal benefits associated
with UTPB are substantial, the
analysis concludes. However, it continues,
the university's importance to the region
extends beyond such effects. In particular,
the study says, UTPB provides crucial
education to support the petroleum sector
and economic development efforts.
Well-trained workers are essential to
economic growth and development as
well as the health of cornerstone industries
such as petroleum, the analysis notes.
In addition, the report details, education
available at UTPB improves quality of
life for students and other area residents,
enhances success of local businesses, and
improves the outlook and potential for
the region.
❒

American Oil and Gas Reporter - September 2022

Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2022

Contents
American Oil and Gas Reporter - September 2022 - Intro
American Oil and Gas Reporter - September 2022 - Cover1
American Oil and Gas Reporter - September 2022 - Cover2
American Oil and Gas Reporter - September 2022 - 3
American Oil and Gas Reporter - September 2022 - 4
American Oil and Gas Reporter - September 2022 - Contents
American Oil and Gas Reporter - September 2022 - 6
American Oil and Gas Reporter - September 2022 - 7
American Oil and Gas Reporter - September 2022 - 8
American Oil and Gas Reporter - September 2022 - 9
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American Oil and Gas Reporter - September 2022 - Cover3
American Oil and Gas Reporter - September 2022 - Cover4
https://www.nxtbook.com/nxtbooks/aogr/202403
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