A drilling well on the Eagle Ford formation in south Texas in May 2012.Eric Gay/AP
The Eagle Ford shale geological formation unfurls through the lower third of Texas, stretching 400 miles long and 50 miles wide from East Texas to Mexico, from Brazos County northeast of Houston to the Burgos Basin just over the border.
It could turn out to be the largest recoverable oil deposit ever found in the Lower 48.
And that, according to Dewitt County Judge Daryl Fowler, is a good thing. Fowler -- a native Texan who ran for office as a pro-oil Republican -- owns a ranch here in the south-central pocket of the state. Before his election, he studied petroleum land management, knowing he'd probably be hearing cases about Eagle Ford.
But from where he sits, behind his tidy desk in the courthouse in the county seat of Cuero, Eagle Ford is how the area can keep its young people from moving away. After all, all it takes now is a high school diploma for someone to land a job at one of the fracking companies near town, with a starting salary of $60,000.
“People who say this is going to end soon are very shortsighted,” says Fowler, 56. “I’m in the camp that says the Eagle Ford will be a catalyst for us to go forward.”
More than two hours northwest of Cuero is an oil pipeline known as Ho-Ho -- an acronym for “Houston, Texas, to Houma, Louisiana.” Until earlier this year it carried crude from the Louisiana Gulf to refineries in Texas. But technology has changed all that.
Now, oil workers can access oil and gas reservoirs underneath hard-to-reach places like towns and lakes, or even in solid rock, by using horizontal drilling and fracturing, or “fracking.” The process uses pressurized water mixed with sand and chemicals. Shell, which owns the Ho-Ho pipeline, recently reversed the direction of its flow. By the end of the year it will carry more than 325,000 barrels of Texas crude to Louisiana refineries.
The Ho-Ho reversal is significant for a slew of reasons, but crucially it illustrates just how huge the fracking boom in places like DeWitt County has become. It is an indication, perhaps, of an intention to eventually export U.S. oil -- a commodity so vital that sending it abroad would take an act of Congress.
Texas has always been known for its oil, and predictions that U.S. production would peak in the 1970s have been proved very wrong. In fact, according to a report by consultancy Wood Mackenzie based on capital expenditure, the Eagle Ford Shale now ranks as the world's largest single oil and gas development.
The U.S. imposed a ban on the export of crude oil in 1979, both because of fears that domestic drilling had peaked and the effects of an oil embargo imposed on it by oil-rich Arab states -- a move prompted by the U.S. support for Israel in the Yom Kippur war. Aside from small amounts to Canada, 40 years on that moratorium still exists.
A map shows the swathe of oil and gas wells on the Eagle Ford gas-shale formation.Texas Railroad Commission
But much has changed since then. Five years ago, the U.S. produced 5 million barrels of oil a day; today it produces 7.4 million, thanks largely to these new methods of extraction. As a result, there is a major oversupply, and as Bloomberg News put it in an editorial in July, the export ban that is still in effect “is threatening to put a damper on the shale-oil boom."
According to Benjamin Salisbury, a senior policy analyst at FBR Capital Markets & Co., it would be a very big deal politically to export crude from the U.S. If that’s ever to happen, he says, “the pain for over-supply of oil, which probably shows up in terms of falling domestic reinvestment in production, has to exceed the fear policymakers have in giving away our strategic natural resources.”
That pain, some say, will come with the realization that the Gulf coast refineries -- complex marvels of modern engineering that cost hundreds of millions of dollars -- are designed to refine heavy, sour crude, but that what the U.S. is producing in abundance is a lighter, sweeter crude. As Salisbury says, “The free market thing to do would be to export the light sweet and import the heavy sour -- less valuable -- product which we’re able to refine.”
This oil boom, naturally, is creating an abundance of jobs. Some farmers and landowners, once struggling, are becoming overnight millionaires. Oilfield supply firms and those manufacturing steel pipes or the concrete that lines disposal wells are all cashing in.