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midland

The Permian is driving the second U.S. shale revolution and has become the hottest shale play in the country, but this Permania has had an adverse effect on Texas and New Mexico, leading to housing shortages and adding an extra burden on the healthcare and education system. So a group of 17 oil and gas companies have teamed up to provide aid of US$100 million to the two states, a group insider told Reuters this weekend.

“It’s a significant amount of money, but these are huge challenges,” Don Evans, former Secretary of Commerce and oil industry executive involved in the setting up of the Permian Strategic Partnership, as the group has been called, said. “We don’t have enough teachers. We don’t have enough doctors,” he added.

The Permian is producing 3.63 million bpd of crude this month, according to Energy Information Administration estimates, and this is set for further growth to 3.69 million bpd next month.

The oil rush has seen hundreds of companies vie for acreage in the play, which has naturally led to all sorts of consequences, including shifts in employment as people leave their jobs to go work in the oil fields, overcrowding in certain parts of Texas and New Mexico—notably in the school system, traffic congestion and more frequent accidents on the roads, and higher crime rates.

The Permian Strategic Partnership involves Exxon, Shell, EOG Resources, and Chevron, Reuters reports, and they will seek to work with local authorities and organizations, including businesses and non-profits, to find the best way to distribute the cash pot.

The challenges, according to the group, are multiple and tackling them won’t be an easy job. Yet with no signs that the Permania will subside anytime soon, these need to be addressed at some point and the sooner, it seems, the better, as problems will only become graver if nothing is done.

By Irina Slav for Oilprice.com

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  • Lee James on November 20 2018 said:
    What everyone knows, and no one overtly talks about, is that the extraction party in your neighborhood will end. We like to think that it will go on forever. If there really was a longer term future for production of the resource, adequate infrastructure would appear. No problem.

    Why are there even such gas and oil pipeline constraints? Adequacy of the resource, long term, perhaps?

    I think we like to wonder about who'll be the last man standing.

    Maybe we're going after the wrong kind of energy. The sun and the wind will be here tomorrow.

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