The oilsands suddenly have a real reason to fear Texas.
The United States Geological Survey (USGS) announced this week that a massive deposit of shale oil had been discovered in west Texas, the largest such field yet found in the U.S.
Known as the Wolfcamp formation, it contains an estimated 20 billion barrels of oil and 16 billion barrels of natural gas.
The Dallas Morning News estimates that, at current prices, the oil alone is worth US$900 billion, or around C$1.22 trillion. But it's unlikely all of that oil could be extracted.
Wolfcamp is three times as large as the Bakken formation in North Dakota — a field so large it has been blamed for depressing Canadian oilsands prices.
Oilsands product sells at a "discount" compared to the benchmark North American price, in part due to difficulties transporting the oil to markets, and in part due to the explosion of oil production in the U.S., which briefly made the country the world’s largest producer of oil. (It fell behind Russia and Saudi Arabia after oil prices crashed.)
There are already companies operating in the Wolfcamp formation, including ConocoPhillips and Pioneer.
“The [USGS] estimate is just a reflection of what a lot of the companies [drilling] out there already suspected,” Federal Reserve Bank of Dallas economist Michael Plante told the Morning News.
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